An alliance of insurance intermediaries in Taiwan is to be formally established today, that would push for the employment of intermediaries and participate in negotiations over how Internet sales are handled.
The new body is called Republic of China Insurance Union Alliance, reported Taipei Times.
The new peak body meets government-set membership criteria for it to be formed. The requirement is that it must have the support of at least a third of Taiwan’s insurance unions which represent at least half of all counties and cities.
More than 80,000 insurance intermediaries are members of unions that are joining the alliance, out of a national total of 280,000, said the Alliance's chairman Yan Ching-lung, who also serves as chairman of the Nan Shan Life Insurance union.
“We hope to establish a powerful representative body that can press the Financial Supervisory Commission (FSC) to craft a better environment to ensure our survival,” he said.
“The overall environment and regulatory system are all changing rapidly and this is quickly affecting us,” he said, adding that intermediaries’ share of insurance sales had fallen to only 35% of the market in the face of competition from direct sales via banks and the Internet.
“Over the past 20 years and especially over the past five or six, we have seen our space continually squeezed and replaced as a result of the government and insurance companies’ new policies,” Nan Shan union deputy chairman Chiu Chun-chi said.
He said that while discounts can be granted on Internet insurance policies, intermediaries are barred from offering similar discounts on pain of losing their licences. He added: “However, whenever a problem occurs, we are still expected to provide help, without any compensation, to the holders of policies we did not sell.”
Furthermore, insurance companies have been able to influence regulatory policy through their industry association, which the FSC charged with crafting the regulatory guidelines for insurance intermediaries, he said, adding that appeals against companies’ disciplinary actions are referred to a board whose members are appointed by the insurers' association.
Mr Yan said that union members hope the alliance could get insurance companies to engage in collective bargaining on the subject of online direct-to-consumer sales and lobby for regulatory changes to incentivise insurers to formally employ intermediaries, rather than treating them as contractors.