Entering the mobile internet era, to continue promoting e-commerce in insurance, the Financial Supervisory Commission (FSC) allowed internet insurance business in August 2014 and permitted life and non-life insurance companies to engage in such business. In October 2015, the FSC further allowed qualified insurance brokers and agents to conduct online insurance business. Now the FSC is starting the phase IV of guiding e-commerce in insurance products to continue promoting online insurance business.
1.Amendments to the Directions Governing E-Commerce of Insurance Enterprises
The FSC has been issuing and amending online insurance business related regulations since August 2014. The latest amendment is the amendments to the Directions Governing E-Commerce of Insurance Enterprises ("Directions"), per letter Ref. No. Jin-Guan-Bao-Zong-Zi No. 10502561081 on 31 March 2016. The main points are as follows.
(1) Points 6 and 7: allow more types of insurance products to be provided via the Internet and stipulate the insurance liability limits
- Non-life insurance:
Mobile devices insurance and bike insurance are added to the list of previously permitted insurance products for online distribution such as automobile insurance, residential fire and earthquake insurance, homeowners insurance, travel inconvenience insurance, personal liability insurance, golf liability insurance, home appliances repair insurance and smart mobile devices theft insurance.
Conventional, interest sensitive annuity and endowment insurance of which the term shall not exceed twenty years and the endowment attaining age shall not exceed attaining age 75 are added to the list of previously permitted insurance products for online distribution such as travel accident insurance, personal accident insurance, term life insurance and medical expense reimbursement insurance.
- Insured amount:
The insured amount of conventional and interest sensitive annuity provided via the Internet may not exceed NTD 1 million and the cumulative insured amount provided by the same company shall not exceed NTD 10 million. The insured amount of the abovementioned endowment insurance shall not exceed NTD 3 or 6 million and shall be fixed and the cumulative insured amount provided by all insurance companies shall not exceed NTD 3 or 6 million (the cap on insured amount shall be determined based on the circumstance of the first registration).
(2) Point 9-1: amendment of procedure of online group insurance application:
Before conducting online group insurance service, the insurance company shall provide the mandatory notification in writing and the sponsoring institution shall agree by signing and affixing the chop, appointing an authorized person in writing, and authorizing each insured to purchase insurance online in the application form. The sponsoring institution shall not engage in the first registration, identity verification and the application for insurance until the insurance company has completed the verification of such authorization.
(3) Points 7 and 10: expand the base of applicants and qualified beneficiaries of death benefit
When the applicant and the insured are different persons, they may register and purchase insurance online by using Citizen Digital Certificate. In addition, statutory successors are newly included as qualified beneficiaries of death benefit.
(4) Point 9: simplify the registration or identity verification for request for the electronic certificate of participation in compulsory automobile liability insurance and the payment procedure of automobile insurance.
(5) Point 14: the applicant applying for particular compulsory automobile liability insurance individually may be exempt from the telephone interview for application confirmation.
2.Points of attention for submitting online insurance applications
Since online insurance platform is different from other channels, when processing online insurance applications, the insurance company and the policyholder shall especially pay attention to identity verification, understanding of the insurance product, restrictions on every type of insurance product, preservation of the transaction information, etc. The insurance company shall pay attention to identity verification and data encryption, and ensure the completeness of the data when underwriting. Since there are no designated personnel for online insurance service and the policy clauses are complex, the policyholder may find it hard to understand the insurance product and appropriately draw up his/her insurance plan, so the insurance company shall enhance its online customer service to promptly interpret the policy clauses. Regarding the restrictions on insurance products, the policyholder shall pay attention to restrictions on the applicant and the insured and the limitations on each insurance product stipulated in the Directions. Although the insurance company conducting online insurance business shall at least preserve the application, review and activation record based on the identity verification of the customer of the online insurance business and the relevant record of interactions between the insurance company and the customer in accordance with the Guidelines Governing E-Commerce of Insurance Enterprises, the policyholder shall keep the record by itself to protect the customer's rights and benefits.
3.Trends in online insurance business
Online insurance service may save the channel costs and commission cost. If the reporting mechanism and data security may be well managed, the e-commerce may prosper in the future. To promote the development of Financial Technology ("FinTech"), the FSC established the FinTech Office in 2015 and, on 12 May 2016, published the "White Paper on FinTech" ("White Paper") approved by the Executive Yuan, Republic of China (Taiwan) on the website. The White Paper predicted that the premiums on online insurance policies will reach NTD 5.86 billion in 2020 and encouraged insurance companies to embrace innovation in FinTech and the application of Big Data, mobile payment, cloud and Internet of Things (IoT).
The FSC will continually promote e-commerce in insurance and encourage insurance companies to research and develop innovative insurance products such as UBI (Usage Based Insurance) that enable insurance companies to regularly collect data on driver behavior and the driving record and use such data to set the premiums on individual policies, and the "Remote Insurance Claims System" that enable insurance staff to connect with the car repair shop online and assess an insurance claim when the insured vehicle owned by a policyholder is to be repaired by a car repair shop, and the policyholder may compare and choose a car repair shop and deliver the insured vehicle immediately. With respect to data security, the insurance company is encouraged to establish a safer cloud service. In addition, the insurance staff shall strengthen the e-commerce capacity including the social media, internet marketing, mobile payment, cloud, Big Data and Internet of Things (IoT) through training so as to respond to the development of e-commerce in the insurance industry.