萬國法律事務所

The Finance Committee of the Legislative Yuan passed a draft of revisions to the Insurance Act which would penalize the promotion of unapproved foreign insurance policy by insurance agents and brokers for no more than three-year imprisonment and a fine not exceeding NT$20,000,000.

The Financial Supervisory Commission thinks that the amendment will prevent the promotion of the unapproved foreign insurance policy. The insurance agents said that they will stop selling those policies once the amendment is enacted. Nevertheless, they indicated that people may still buy those foreign insurance policies from the financial consultants in the banks or other stock dealers.

The insurance agencies pointed out that since the interest rates in the foreign markets are lower than those in Taiwan, buying the foreign insurance policies (especially those from Hong Kong or the United States) are cheaper. Furthermore, since the foreign insurance policies are harder for the tax authorities to trace, they become good tax planning options for the rich. In the past, lawyers, doctors and accountants were those who would buy the foreign insurance policies. During recent years, the engineers started to buy these policies. There were also people who join the tourist groups and went to Hong Kong to buy the insurance policies during their trips. The more recent foreign insurance products are the Chinese Yuan insurance policies. As admitted by the Professional Insurance Brokers Association, one out of four insurance companies is selling foreign insurance policies.

The Financial Supervisory Commission believes that the trend of selling foreign insurance policies will be stopped by amending the Insurance Act and adding harsher punishments.