Changes to insurance law
Chun-yih Cheng

The amendments to Taiwan's Insurance Law passed the third reading of the legislative body in mid-June to deter unapproved offshore insurance policies by raising the punishment from administrative fines of between NT$900,000 ($31,200) and NT$4.5 million to imprisonment of up to 3 years or criminal fines between NT$3 million and NT$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 their business.

There are many unapproved offshore policies sold in Taiwan by insurance brokers or financial consulting companies. Because the policies are written in English, the insured often could not fully understand the exact scope of insurance, leading to various disputes. In addition, since these insurance companies are all located overseas without a 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 considered that light punishment has contributed to the sale of unapproved offshore policies. Therefore, it 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 use 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 use such sensitive personal data so that insurance companies may not run their businesses smoothly, and that some insurance frauds and moral hazards might be encouraged. The amendments have allowed insurance companies to collect and use personal data related to medical records, medical treatment and health checks under certain conditions (such as for the purpose of insurance business and with the written consent of the data subject) in order to address these concerns.