萬國法律事務所

The Financial Supervisory Commission, Executive Yuan (FSC) has recently decided that banks which intend to promote insurance policies in their business venue will be required to set up an internal department for insurance agents and brokers. The reason for this is that banks have recently become a common and important platform to promote and sell insurance policies. However currently, almost all banks in Taiwan promote and sell insurance policies by establishing a separate company, in order to shield the banks themselves from liabilities. With FSC’s decision to request banks set up an internal department for insurance agents and brokers, the banks are no longer allowed to invest in another separate entity for the purpose of selling insurance policies. Instead, as the insurance agents or brokers become also employees of the bank, the bank will be jointly liable as the employer in the event of any default or misrepresentation on the side of the agents or brokers.. This in a way provides security to the consumer where in the event any dispute arises, the bank or the so called “deeper pocket” will be jointly liable.

In addition, the FSC will prohibit banks from promoting or displaying insurance products in the bank counter. In the future, banks are required to set up specific counters for the insurance products in order to avoid any misrepresentation to the public. This is to avoid any confusion of the consumers that the insurance products they purchased are products related to bank services in any way.

Moreover, FSC will grant the banks a grace period in order for the banks to be able to adjust their practice accordingly.

FSC states that the new practice will also be beneficial to banks as it helps to reduce additional tax that may be incurred by setting up a new company such as business and income tax. Nonetheless, this will inevitably increase the burden of the bank, where the bank will need to thoroughly consider which insurance company to cooperate with, especially with the possible risk that may involve.