The FSC introduced the amendments of Article 2, Article 3, and Article 4 of Standards for the Levy Rates of Life and Non-life Insurance Guaranty Fund (“the Standards”) on July 18, 2017, in order to (1) encourage the insurance industry to provide insurance to people with physical and mental disabilities and insurance with minimum coverage to senior people, and provide the insurance industry more incentives to launch such products, (2) give the insurance industry a grace period for introduction of new (risk) indicators, and (3) obtain accurate measurement results of operation and management performance using various indicators. The key points of the amendments are:

1.          Life insurance: the FSC introduced new indicators for measurement of operation and management performance. Such performance is a factor that determines an insurance company’s rate of contribution to the Life Insurance Guarantee Fund. (1) Two new indicators under “indicator-related business” category, or premium income from life insurance for people with physical and mental disabilities and premium income from insurance with minimum coverage to senior people, were incorporated (into the measurement of operation and management performance). Weightings of the indicators were adjusted and the number of indicators (for the measurement of operation and management performance) was increased from 9 to 11. (2) Change of calculation formula for the indicator measured by average sum insured of death benefit of a policy. (3) Change of rating criteria for the indicator measured by premium income of micro-insurance. (4) Change of criteria for point deduction due to the authority’s reprimanding for the regulatory compliance indicator.

2.          Non-Life insurance: the FSC introduced a new indicator for measurement of operation and management performance. Such performance is a factor that determines an insurance company’s rate of contribution to the Non-Life Insurance Guarantee Fund. (1) One new indicator under “indicator-related business” category, or premium income from injury and health insurance for people with physical and mental disabilities, was incorporated (into the measurement of operation and management performance). Weightings of the indicators were adjusted and the number of indicators (for the measurement of operation and management performance) was increased from 9 to 10. (2) Incorporation of the definition of formal and informal qualification of an actuary in the non-life insurance industry into the rating criteria of the indicator measured by the number of actuaries (with formal and informal qualification) in a non-life insurance business. (3) Change of rating criteria for the indicator measured by premium income of micro-insurance. (4) Change of criteria for point deduction due to the authority’s reprimanding for the regulatory compliance indicator.