Taiwan Insurance Information

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General Taiwan Insurance Information

• Compulsory Insurance:
  
  1. Third Party Automobile Liability;
  2. National Health;
  3. Pension;
  4. Unemployment;
  5. Workers’ Compensation (injury & death benefits).
• Non-Admitted Insurance:
  Prohibited unless approval given by the Ministry of Finance.
• Policy Wordings & Rates / Tariffs Controlled:
  Property, Automobile, Liability, Employer’s Liability, Crime, and

  Marine Hull are subject to tariff regulation. The Ministry of Finance must approve all policy wordings.

• Policy Language:
  Chinese. Marine policies can be offered in English. English translations of most policies are available.
• Types of Insurance Restricted to Government Institutions:
  Workers’ Compensation; National Health; Export Credit.
• Policy Currency:
  New Taiwan dollar (TWD). Policies must be issued in NT$.
• Currency Restrictions / Exchange Controls:
  No permission required to remit premiums up to US$ 5 million. For higher premiums, permission must be granted from the Central Bank of China and the Central Reinsurance Corporation.
• Policy Period:
  Annual. Contractors policies can be written for longer periods.
• Cancellation Provisions:
  7-30 day written notice (registered letter). Check the cancellation provisions of each policy.
• Premium Taxes, etc. paid by Insured:
  5% - most lines;
  1% - reinsurance tax;
  0.4% - Stamp Duty.
  
• Insurance Companies:
  Foreign insurers can operate in accordance with Insurance Act Articles 136 & 137 which stipulate that “foreign companies shall not operate unless it has received approval from the competent authority, completed business registration, posted a bond, and secured a business license in accordance with the law.”
• Brokers:
  Local and international brokers operate in this market which also employs general and exclusive agents. All intermediaries must be licensed.
• Brokerage Commissions:
  10% - fire (property);
  12.5% - liability;
  10% - automobile, Marine.
  Commissions cannot be paid to brokers outside of Taiwan.
• Broker of Record Letters:
  Not required by all Insurers. Filing a BOR is a good business practice though.
• Reinsurance:
  Mandatory cessions to the Central Reinsurance Company are required for Fire, Marineand Automobile. The amount ceded is limited so outward facultative reinsurance allowed once local requirements have been met and approval given by the Ministry of Finance. Limited local availability.
• Local Natural Hazards:
  Typhoon, Flood, Earthquake
• Other Information:
  

Property Insurance

• Fire:
  Standard fire perils follow the Fire Offices’ Committee (F.O.C.) foreign form and includes lightning. By endorsement and the payment of an additional premium the perils of windstorm, earthquake, flood, strike, riot / civil commotion and typhoon are available in the local market.
• All Risk:
  Available for Contractors related risks.
• Coinsurance:
  80%.
• Blanket Insurance:
  Available but rare.
• Business Interruption:
  UK Loss of Profits and U.S. Gross Earnings forms are available.
• Replacement Cost:
  Available.
• Discount for fire protection equipment / systems: Credits available.

Boiler & Machinery / Machinery Breakdown / Engineering

• Wordings:
  Locally adapted European (German) forms available. Inspections are required by law.

General / Public Liability

• Available Wordings:
  Comprehensive General / Public Liability including Product Liability. Non-owned and Hired Automobile coverage can be endorsed and covered for an additional premium.
• Comments:
  Policies can be written on an occurrence basis.

Automobile / Motor

• Compulsory Limits:
  NT$800,000 required for Bodily Injury and Property Damage.
• Comments:
  Excess limits are available. Passengers are not automatically considered Third Parties but coverage can be endorsed. Coverage applies to the Insured and any licensed individual driving with the Insured’s permission. Own Damage coverage is available. Fleet rating is available. Note: Premiums must be paid before cover is granted.

Workers’ Compensation

• Comments:
  All employees are covered under the Social Security Scheme. Medical Expenses are not covered under this coverage but rather under the National Health Insurance Program. The holds true for Occupational Disease. Employees have the right to sue under Taiwan’s Code of Civil Law. Travel to and from work is covered under the Workers’ CompensationScheme. Employer’s Liability is available.

Marine

• Available Wordings:
  Forms based on the Institute of London Underwriters clauses are available. War Risks and Strikes rates follow London scale. U.S. wordings are also available.

Crime

• Available Coverages:
  Fidelity, Theft, Burglary and various Bonds are locally available.

Updates & Additional Information: