Newsletter
Directions for Insurance Enterprises Conducting Insurance Business Online Issued with Immediate Effect
FSC issued the Directions for Insurance Enterprises Conducting Insurance Business Online (Ref. No. Jin-Kuan-bao-Chan10302525831) on 26 August 2014, effective on the same day, as summarized below
1. It is stipulated that Insurance Enterprises conducting the insurance business online shall meet certain finance and business standards and have the required capability to operate insurance business online.
2. Stipulations regarding types of insurance products and insurance coverage limits: for property insurance products and life insurance products, respectively, allowed online. Insurance coverage limit on the former is based on premium, the latter is limited by insurance coverage. Both require the applicant and the insured be the same person.
3. Stipulations for method of first time registration and identity verification: Insurance Enterprises shall make it feasible for customers to conduct first time registration and identity verification online or by visiting the Insurance Enterprises in person. Life insurance products available online may be offered only to existing customers holding policies-in-force issued by the Insurance Enterprises concerned.
The identity verification is valid for five years. If during the aforesaid five-year period a customer has not paid to maintain continuous coverage or purchase insurance, revised the security, filed claims and so on (including but not limited to activities online), the customer may not use the account and password to buy insurance online unless s/he redo the first time registration and identity verification.
4. New stipulations for applications, underwriting and reporting matters relating to insurance: incorrect premium and duplicate insurance shall be avoided when underwriting property insurance products; attention shall be paid not to exceed the insurance coverage limits set out in the schedule when underwriting life insurance products; and regulatory reporting shall be made immediately on the date of completing underwriting.
5. Stipulations for payment processing: stipulations for payment processing differentiated between first time registration and identity verification online vs. visiting insurance enterprises in person (or certificates issued by other financial service providers).
6. Mechanism stipulated requiring Insurance Enterprises to phone the applicants to confirm their willingness to purchase the insurance policies concerned.
Separately, to respond to the internet era, promote migrating Insurance Enterprises online and increase insurance channels, in addition to stipulating the Directions for Insurance Enterprises Conducting Insurance Business Online, the FSC reviewed, amended, and issued for implementation and recordation relevant regulations and complementary measures. The amended laws mentioned above are as follows:
1. Amendment to The Template of Standard Contracts of Network Services: electronic messages exchanged online shall have the same validity as signed writing or written documents.
2. Review and approval of the Self-discipline Standards of Insurance Enterprises Engaging in Electronic Commerce amended by the Non-life Insurance Association and the Life Insurance Association: regulation of identity verification, underwriting, payment, recordkeeping and internal control and auditing, and inclusion of the foregoing as items of internal control and auditing.
3. Review and approval of the Self-discipline Standards Regarding the Recordkeeping of Electronic Commerce of Insurance Enterprises and the Internal Security Operation System Management amended by the Non-life Insurance Association and the Life Insurance Association: to accommodate the operation of electronic policies in practice, the name was revised to "Self-discipline Standards for Insurance Enterprises Processing and Issuing Electronic Policies” and what constitutes an e-insurance policy is clearly defined.