Proposed Amendments to Insurance Law to Deter Unapproved Offshore Insurance Policies and to Enable Collection of Sensitive Personal Data
Chun-yih Cheng

The amendments to the Insurance Law have passed the first reading of the legislative body in May to deter unapproved offshore insurance policies by raising the punishment from administrative fines between TWD 0.9 million and 4.5 million to imprisonment of up to 3 years, or criminal fines between TWD 3 million and 20 million, or both. On the other hand, the amendments allow insurance companies to collect sensitive personal data, which is otherwise prohibited by the Personal Data Protection Law, to facilitate smooth operation of insurance business.

Currently, there are many unapproved offshore policies sold in Taiwan by insurance brokers or financial consulting companies. Because the policies are written in the English language, the insured could not fully understand the exact scope of insurance, leading to various disputes. In addition, since these insurance companies are all located overseas without presence in Taiwan, upon the occurrence of risks, the insured must deal with such overseas insurance companies directly, which is quite difficult for the insured because of language barrier and geographic distance.

The Financial Supervisory Commission has considered that light punishment has contributed to the sale of unapproved offshore policies. Therefore, it has proposed to amend the Insurance Law to raise the punishment with the expectation that the sale of unapproved offshore policies will be deterred.

On the business operation of insurance companies, in order to protect personal data, the Personal Data Protection Law has prohibited the collection and utilization of sensitive personal data such as medical treatment and health checks unless otherwise permitted by law. The current Insurance Law does not permit insurance companies to collect and utilize such sensitive personal data so that insurance companies may not run their businesses smoothly, and there might encourage some insurance frauds and moral hazards. The amendments have proposed to allow insurance companies to collect and utilize personal data related to medical records, medical treatment and health checks under certain conditions (eg., for the purpose of insurance business and with written consent of data subject) in order to address these concerns.