Regulations Governing Taiwanese Insurance Brokers Updated

by WP

The Insurance Bureau has updated its Regulations Governing Insurance Brokers to reflect amendments to the Insurance Act.

Insurance brokers are now required to carry professional liability insurance and bonding insurance (similar to a surety bond) as well as a bond. Previously brokers were required to carry either insurance or post a bond.

The separate bonds that insurance brokers are required to post have also been amended. They now range from NT$100,000 to NT$3 million (c US$8,000 – c. US$100,000)  depending on turnover. This levels the playing field since it brings the amount of the security bond that larger domestic brokers must post in line with the NT$3 million that foreign branches are already required to post.

The updated Regulations also spell out the requirements for the contents of the legal compliance handbooks that insurance brokers are now required to compile as part of their internal controls. The qualifications of the newly-required legal compliance officer are also listed and the legal compliance officer is prohibited from serving concurrently as the broker’s internal auditor.

For more details on internal controls at insurance brokers, please see our update from last month “Internal Controls Required at Taiwanese Insurance Intermediaries.”

The changes to the Regulations become operative on 1 July 2012.