The Taiwan government is urged to adopt measures to incentivise insurers to offer protection insurance and to increase convenience for consumers to obtain protection insurance.
In a white paper, the Insurance Committee of the American Chamber of Commerce in Taipei says that Taiwan faces a serious protection gap. Closing this gap by increasing convenience for consumers to obtain protection insurance is one of AmCham’s top priority issues in the 2017 Taiwan White Paper.
While the Insurance Committee recognises that structurally amending mechanisms within the insurance industry is a long-term goal, it nonetheless proposes various short-term solutions that can effect positive change quickly, including streamlining life and non-life insurance tax methods and reevaluating taxation of protection insurance products to make them more attractive to insurers and consumers.
Taking into account the social benefits offered by protection insurance products, the government should exempt or reduce the business tax for insurers that promote protection products, says the paper.
The Insurance Committee also urges the government to increase the transparency of obtaining insurance and to leverage innovative products and technologies to empower citizens to get the coverage they need.
Outlining tangible steps the authorities can take to achieve this goal, the paper says that enhancing the ease, transparency, and convenience of using online resources to acquire insurance is crucial to enabling a greater portion of society to access needed protection coverage.
Regarding the “Regulation on Insurance E-Commerce” announced in March 2016, the Committee’s position paper recommends simplifying the application process, allowing more products and a larger amount of insurance to be transacted on e-commerce platforms, and permitting additional electronic payment methods.
A more effective mechanism of protecting consumers’ right to knowledge of insurance policies must replace the current contract pre-review period. Insurance contracts already contain a generous 10-day cancellation period, which protects consumers’ rights to information and redress. The pre-review period obstructs consumers’ ability to obtain simple and immediate insurance protection, as there is no insurance coverage during this period.
The Committee maintains that more consumer-friendly alternatives, “such as amending the insurer’s information disclosure obligation and legalizing the right of revocation during the cooling-off period,” need to be explored as mechanisms to replace the burdensome and ineffectual pre-review period.
The paper also says that to harness the power of FinTech to develop and strengthen the insurance industry, current restrictions on digital insurance must be removed. Such reforms would increase the number of participants in and accelerate the growth of insurance e-commerce in Taiwan. In addition, the Insurance Committee urges the establishment of a legal basis to use electronic recordings for underwriting purposes, in line with global insurance technology development.