Newsletter
Partial Amendment to the Regulations Governing Business Solicitation, Policy Underwriting and Claim Adjusting of Insurance Enterprises
On 7 November 2013, the FSC partially amended the Regulations Governing Business Solicitation, Policy Underwriting and Claim Adjusting of Insurance Enterprises. Main points of the amendment are as follows:
1. To strengthen the regulation of insurance enterprises' business solicitation, it is stipulated that an insurance enterprise shall incorporate the full understanding of individual policyholders and the insured, insurance product suitability, salespersons' obligation to honestly fill out the solicitation report and the rules for insurance enterprises' management of insurance agents into an insurance enterprise's internal rules and procedures for business solicitation, so as to strengthen the administration of solicitation conduct of insurance enterprises and salespersons.
2. To strengthen insurance enterprises' administration of policy underwriting, it is stipulated that insurance enterprises are required to incorporate the mechanism for financial justification and standards for life insurance medical exams into insurance underwriting process and flow chart, specific suitability policies and the evaluation processes for determining the appropriate coverage terms and premium by weighing insurance coverage and premium against the income, financial situation and occupation of the insurance prospects or the insured into an insurance enterprise's internal regulations and procedures for policy underwriting and claim adjusting.
3. The grace period given in 2010 upon amendment to the Regulations Governing Business Solicitation, Policy Underwriting and Claim Adjusting of Insurance Enterprises in order for insurance enterprises to make adjustment is no longer needed. However, in consideration of the transition period needed to adapt to comply with the amendment to the Regulations this time, it is stipulated that an insurance enterprise's rules and procedures for business solicitation and policy underwriting which do not satisfy Articles 6 and 7 of the Regulations amended and effective on 7 November 2013 shall be modified before 1 March 2014.
4. To strengthen the firewall mechanism for the insurance enterprises' business solicitation, policy underwriting and claim adjusting, it is stipulated that a claim adjuster may not work on claim cases that he/she underwrote within the last three years and the policy underwriter and claim adjustor may not work on underwriting and claim cases that he/she solicited.