The Taiwanese insurance regulatory authorities are urged to take bolder steps than they had already taken to improve consumers' access to protection products in a transparent manner by leveraging innovative products and technologies.
This point is made by The American Chamber of Commerce in Taipei in its recently released 2017 White Paper which includes an overall assessment of Taiwan’s business climate, a review of the status of last year’s priority issues, and statements of the current priority issues identified by AmCham’s industry-specific committees, including those related to insurance.
The Amcham Taipei Insurance Committee says that its main theme is the need for increased insurance protection for individuals and families in Taiwan.
The Committee's recommendations regarding enhanced access to protection cover include:
1.Enhance the ease of use of digital means to obtain insurance
Taiwan continues to lag behind other jurisdictions in enabling insurance transactions via electronic means, says the Committee. To maintain positive momentum in facilitating insurance e-commerce, it 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.
Further, while amended regulations allow for the applicant and the insured to be different individuals, a physical identification certificate must still be used in order to complete the transaction, notes the Committee. Obtaining this “Citizen Certification Card” requires very specialised equipment and precludes most individuals from utilising this approach. The Committee encourages the relevant authorities to remove this requirement, as it clearly discourages bringing the insurance business into the digital age.
In addition, the application of insurance technology to the open data platform of health statistics, or the collection and analysis of data collected from insurance-tech devices, cannot be achieved without the application of big data. However, the legality of collecting, analysing, or using big data may be challenged under the Personal Data Protection Law. The Committee recommends that the regulator establish special provisions for the protection of personal data in the insurance industry in order to meet the needs of insurance technology development.
2.Establish a more effective mechanism to replace the contract pre-review period
The Committee also recommends that the regulator replace the pre-review period with other more consumer-friendly alternatives, such as amending the insurer’s information disclosure obligation and legalising the right of revocation during the cooling-off period to replace the contract pre-review period in the Consumer Protection Act. The contract pre-review period does not serve the purpose of protecting the consumer’s right to knowledge of the important information in insurance policies. Instead, this requirement hinders consumers from getting simple and immediate insurance protection through e-commerce and telemarketing channels, says the Committee. As the consumer enjoys no insurance policy coverage during the pre-review period, and insurance contracts already include a generous 10-day cancellation period after receipt of the policy, the pre-review period mechanism should be replaced with other more consumer-friendly alternatives.
3.Remove restrictions limiting the development of FinTech
While there are recent government efforts to promote FinTech in Taiwan, a ruling on 22 October 2015 seems contrary to this direction, as it limits the number of insurance broker or agency companies that will be allowed to conduct digital online insurance to 10, and requires these companies to have a minimum annual revenue of NT$500 million (US$16.6 million) to qualify. This requirement would clearly exclude young and innovative companies, enabling only traditional and established businesses (which are accustomed to engaging in face-to-face sales by agents) to apply.
In order to properly harness the power of FinTech, these limitations should be removed in the interest of increasing the number of participants and accelerating the growth of digital insurance in Taiwan. In addition, insurance broker and agency companies still cannot connect to insurance companies’ e-commerce systems because of electronic signature issues, which require further resolution by the regulator.
4.Establish a legal basis for electronic recordings in line with insurance technology development
As digital and telephonic means to acquire insurance are becoming increasingly popular with consumers, electronic recordings of clients’ responses for underwriting purposes should be accepted as a legal basis to challenge or rescind a policy. The Committee requests that the “Directions for Insurance Enterprises Engaging in Telemarketing Insurance Products” be revised to permit the legal acceptance of electronic recordings. The change would bring Taiwan in line with international practices in this regard and help to further promote digital insurance.