The Committee appreciates the government’s efforts over the past two years to continue aligning the insurance industry with international standards and innovate in new areas, including e-commerce, Offshore Insurance Units (OIUs), and wealth management. We welcome these developments and look forward to supporting Taiwan to deepen and expand its financial liberalization in areas such as insurance-related products, services, foreign exchange, and digitalization.

Suggestion 1: Enable cross-border purchasing of digital insurance products.

Given the increasing market demand for digital insurance, easing identity verification procedures and related regulations has become increasingly important for delivering more robust digital insurance services. A significant step forward was the proposal to allow customers that are Taiwanese nationals residing overseas to purchase insurance products remotely through local insurers’ OIU branches by the end of 2025. The Committee looks forward to early implementation of this change, in response to strong demand from those residing, working, and studying abroad.

Suggestion 2: Adopt differentiated supervision after implementing the new generation solvency system.

The new generation solvency system, Taiwan Insurance Solvency (TIS), introduces a more risk-sensitive approach to evaluating insurers’ financial strength, defined as their ability to meet future policyholder claims. Following its implementation, the Committee recommends adopting differentiated supervision based on each life insurer’s financial position. For companies that have not applied for any TIS transitional measures and whose capital adequacy ratio, which measures how much capital an insurer holds relative to required minimum levels, is more than twice the requirement, supervision can be moderately relaxed. For these capital-adequate companies, we recommend easing certain product and investment restrictions and simplifying the review of cash dividend distributions.

2.1   Relax product approval for combined participating and non-participating health or injury insurance. Taiwan’s life insurance market has sold participating policies for more than 20 years, and the Financial Supervisory Commission (FSC) has further improved product governance through its 2024 “Directions for Life Insurance Companies Conducting Participating Insurance Business.” At the same time, traditional non-participating products, including interest-sensitive products, are already commonly combined with non-participating health or injury insurance and are subject to a file-and-use product approval process. Experience with these combined products shows that, as long as there is complete sales disclosure, customers do not misunderstand the non-guaranteed elements. We recommend allowing companies with capital adequacy ratios exceeding twice the required minimum to use a file-and-use process for participating products combined with non-participating health or injury insurance.

2.2   Simplify the cash dividend review mechanism for capital-adequate insurers. Under the Company Act and the Insurance Act, a company may distribute profits after covering losses, paying taxes, and appropriating all required legal and special reserves. The financial statements must be audited by an accountant, approved by the company’s board of directors, and then ratified by a shareholders’ meeting before cash dividends can be paid. However, FSC administrative order No. 10202501992 additionally requires life insurers to obtain prior approval from the FSC before distributing cash dividends. The FSC conducts a case‑by‑case review of the insurer’s implementation of new accounting standards, operating performance, and financial soundness. We suggest allowing companies with capital adequacy ratios exceeding twice the required minimum to distribute cash dividends in accordance with the Company Act and the Insurance Act without the need for separate prior FSC approval, due to having demonstrated sustained financial discipline and sound management performance.

2.3   Allow reserves for next-year foreign currency non-investment-linked life insurance products to be excluded from foreign investment limits to improve asset-liability matching. With the implementation of International Financial Reporting Standard 17 Insurance Contracts (IFRS 17) and the TIS, effective asset-liability management has become even more important for life insurers. For non-investment-linked policies with foreign currency receipts and payments, it would be desirable to invest 100% of the relevant reserves in foreign currency assets to achieve better matching.

Foreign life insurers in particular rely heavily on such products and therefore have a strong demand for matching foreign currency assets. However, Paragraph 2, Article 146-4 of the Insurance Act imposes foreign investment limits, including a cap on the proportion of funds that may be invested abroad, which constrain the sale of these policies and increase the difficulty of developing Taiwan as the “Asian Asset Management Center”. For insurers with sufficient capital, we therefore propose that reserves set aside for next-year sales of non-investment-linked life insurance products with foreign currency receipts and payments be excluded from the calculation of their foreign investment limits. In addition to existing transitional relief, this type of incentive-based supervisory measure rewards insurers that meet the relevant solvency and governance standards.

Suggestion 3: Build an innovation base in the local asset management zone using a “closed-loop experiment” approach.

The government is establishing Local Asset Management Zones, which prioritize the pilot implementation of international-level financial products within a limited geographical area, target specific high-net-worth clients, and employ a limited number of qualified financial institutions. The Committee supports the Local Asset Management Zone initiative and encourages the introduction of additional insurance-related pilot programs.

3.1   Introduce multi-currency conversion policies to meet dynamic asset-allocation needs. To meet the asset liquidity requirements of high-end international clients, we recommend assessing the pilot program of multi-currency conversion policies within the designated area. These products allow policyholders to freely switch the currency of an account under a single contract, depending on life stages, such as overseas study, retirement, or inheritance.

3.2   Incorporate global asset-allocation services into regulations to enhance synergies for cross-border financial groups. To meet the needs of high-net-worth clients for global asset-allocation and one-stop services, priority should be given to ensuring the legitimacy of products from foreign affiliates of local insurance companies within the designated zone. Under the regulatory framework, professional advisors should provide information sharing and administrative assistance. This step will leverage the synergies of cross-border collaboration among financial groups and prevent unscrupulous brokers from misleading policyholders into purchasing questionable products.

3.3   Relax foreign-investment limits for foreign currency products in the asset management zones to enhance fund utilization resilience. The current foreign investment limit system for the insurance industry restricts the industry’s returns and asset-allocation space. Granting exemptions within the pilot program of these zones would significantly increase the flexibility of the insurance industry’s fund utilization. To ensure the international competitiveness of foreign currency products sold within the established zones, reserves for such products should not be included in calculating foreign-investment limits under Article 146-4 of the Insurance Act.

Suggestion 4: Provide guidance on the review of premium rate and policy conditions for one-year guaranteed-renewal personal health insurance products.

Given the rapid changes in the healthcare environment, including rising medical costs, increased claim frequencies, aging populations, and the introduction of new medical technologies, the original pricing assumptions for health-insurance products risk becoming inadequate several years after launch. To ensure the sound operation of the insurance market and to maintain long-term, sustainable protection for policyholders, insurance companies should be allowed to adjust the renewal premium rates for guaranteed renewable individual health-insurance products.

On July 25, 2025, the Taiwan Insurance Institute (TII) convened a meeting of insurers to discuss revisions to the “Operating Procedures and Reporting Format for Rate Testing Standards of One-Year or Shorter Accident and Health Insurance Products” as the basis for premium adjustments to guaranteed renewable individual health-insurance products. Subsequently, TII drafted revised guidelines and added an appendix providing supplementary explanations on the review of premium rates and policy conditions for one-year guaranteed-renewal personal health-insurance products. The appendix specifies limits on premium adjustments and has been submitted to the Insurance Bureau, where it remains under regulatory review.

To enhance system transparency, ensure the reasonableness of premium adjustments, and provide a clear legal framework for industry compliance, the Committee urges the Insurance Bureau to expedite approval and promulgation of the new appendix so that insurers have a regulatory basis for adjusting renewal premium rates of guaranteed-renewable health insurance products, thereby supporting the long-term sustainability of such products.