FSC issued a ruling to explain the Regulations Governing Business Solicitation, Policy Underwriting and Claim Adjusting of Insurance Enterprises

07/01/2013

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FSC issued a ruling (Ref. No. Jin-Kuan-Pao-Shou-10202545341) on 4 June 2013 to explain Subparagraph 7 of Paragraph 1 of Article 6 of Regulations Governing Business Solicitation, Policy Underwriting and Claim Adjusting of Insurance Enterprises, effective on 1 July 2013. Main points of the ruling are as follows:
1.	The warning statement below shall be added to the promotion documents of insurance products including life insurance and annuity insurance in a bold and clear way by life insurance enterprises:
	"The death benefit of a life insurance policy and the defined benefit of an annuity policy payable to a designated beneficiary upon the death of the insured shall not be deemed to be part of the insured's estate pursuant to Article 112 of Insurance Act. However, if the purpose of such insurance arrangement is to circumvent taxes including but not limited to estate taxes, the tax related laws and the substance over form principle in Article 12-1 of Tax Collection Act may be applied by the tax authority."
2.	Life insurance enterprises shall deliver promotion documents to policyholders and make sure policyholders do understand the aforementioned warning statement when promoting the aforementioned insurance products. If there will be any wording related to tax deduction in the promotion documents, the wording shall be limited to the content of the Estate and Gift Tax Act, Income Tax Act, Insurance Act or related laws, and the abovementioned warning statement shall be included.