Newsletter
Taiwan's FSC Starts Accepting Applications for Establishing Digital Insurance Companies
To introduce innovative technologies into the insurance market, Taiwan's Financial Supervisory Commission (FSC) now permits the establishment of digital insurance companies. By introducing innovative operating models, the FSC aims to break through traditional insurance industry mindsets, enhance operational efficiency, and improve consumer rights and interests. On July 30, 2025, the FSC issued a notice (Ref No: Jin-Guan-Bao-Zong-Zi No. 11404928771) concerning amendments to relevant regulations including the "Regulations for Establishment and Administration of Insurance Enterprises", "Regulations Governing Pre-sale Procedures for Insurance Products", "Regulations Governing Business Solicitation, Policy Underwriting and Claim Adjusting of Insurance Enterprises", "Regulations Governing Public Disclosure of Information by Non-life Insurance Enterprises", "Regulations Governing Public Disclosure of Information by Life Insurance Enterprises", "Regulations Governing Non-Life Insurance Enterprises Engaging in Injury Insurance and Health Insurance", and "Regulations for Establishment and Administration of Foreign Insurance Enterprises". Certain main points of the amendments are summarized as follows:
1. Encourage the Establishment of Digital Insurance Companies
In reference to international operating models and considering the practical challenges of operating insurance entirely through online channels, it is proposed to revise the term "internet-only insurance company" to the internationally recognized "digital insurance company" or "digital insurer." The definition has also been revised to refer to insurance companies that utilize financial technology or digital innovations to provide a certain proportion of innovative insurance products or services.
(1) The minimum paid-in capital requirement is reduced to NT$500 million for digital non-life insurance companies and NT$1 billion for digital life insurance companies. (Article 29-3 of the Regulations for Establishment and Administration of Insurance Enterprises)
(2) The previous restriction that promoters must include financial institutions and persons with financial technology expertise is removed. Instead, the eligibility of major shareholders of digital insurance companies will be reviewed by the competent authority, and the professional qualifications of responsible persons shall be examined in accordance with the Regulations Governing Qualification Requirement and Concurrent Serving Restrictions and Matters for Compliance by the Responsible Persons of Insurance Enterprises. (Original Article 29-4 of the Regulations for Establishment and Administration of Insurance Enterprises)
(3) The deadline for applying to establish a digital insurance company is removed, allowing sufficient time for industry players to organize management teams and plan feasible operating models. (Original Article 29-2 of the Regulations for Establishment and Administration of Insurance Enterprises)
(4) Rules on operating model of digital insurance companies are relaxed: sales activities are no longer confined to the internet or electronic communication channels. (Article 29-1 of the Regulations for Establishment and Administration of Insurance Enterprises)
(5) Expressly stipulate that digital insurance companies applying to conduct online insurance business are not subject to the qualification requirements set forth in Paragraph 2 of Point 5 of the Directions for Insurance Enterprises Engaging in Electronic Commerce Business, such as the most recent year’s capital adequacy ratio meeting the standards or the Treating Customers Fairly Principle evaluation ranking in the top 80% of the industry. This is intended to facilitate digital insurance companies established for less than one year to conduct online insurance business. (Point 5 of the Directions for Insurance Enterprises Engaging in Electronic Commerce Business)
2. Permit Foreign Insurance Enterprises to Establish Digital Insurance Branches in Taiwan
The Regulations for Establishment and Administration of Foreign Insurance Enterprises have been amended to specify the qualifications and required documents for foreign insurers applying to set up digital insurance branches in Taiwan to conduct digital insurance business. For example, an application form for the “Operating Model and Planning of Insurance Products and Services” will be added, requiring foreign insurers to provide detailed description of the operating model, insurance product and service plan, innovation details, and expected benefit assessment for the proposed digital insurance branch.
3. Requirements for Strengthening Innovative Business Capabilities
(1) Threshold for Innovation Ratio
Starting from the fiscal year following the commencement of business operations and within the period specified in the establishment approval letter, a digital insurance company shall ensure that the insurance premium income or the number of sales cases related to innovative insurance products and services approved by the competent authority reach at least 20% of the total insurance premium income or total number of sales cases for all insurance products each year. The relevant data shall be reported to the competent authority within two months from the end of each fiscal year.
(2) Required Information on the Business Plan
The business plan submitted by a digital insurance company shall specify an operating model with certain unique and innovative business capabilities, the planning of insurance products and services, the expected ratio of innovative insurance products and services, the potential risks associated with the adopted financial technology or digital technology, and the corresponding risk management mechanisms. (Article 29-6 of the Regulations for Establishment and Administration of Insurance Enterprises)
4. Regulations Related to Innovative Insurance Products and Services
(1) Clarification of Review Procedures
Formulate the Operational Guidelines for the Review of Innovative Insurance Products and Services, explicitly specifying the required documents and procedures for applying for sale and business trial of innovative insurance products and services. Before submitting an insurance product for review, the digital insurance company should ensure that the analysis report has been signed by the relevant department head and the compliance officer, confirm that no third-party patent rights are infringed, and adopt appropriate risk management mechanisms for potential risks associated with the use of financial technology or digital technology.
(2) Adjustment of Submission Documents
Amend the appendices to the "Directions for Non-life Insurance Product Review Insurance Products" and the "Directions for Life Insurance Product Review Insurance Products" to add prescribed document formality applicable to innovative products, thereby facilitating the competent authority’s review of whether the innovative insurance products submitted by digital insurance companies comply with the requirements set forth in Paragraph 2 of Article 29-1 of the Regulations for Establishment and Administration of Insurance Enterprises—namely, that such insurance products or services "are able to utilize financial technology or digital technology, are significantly different from existing insurance products or services, and can effectively improve service efficiency, reduce costs, enhance consumer rights, improve consumer experience, or promote inclusive finance."
(3) Information Disclosure
Digital insurance companies shall, within ten days from the date of approval of an innovative insurance product or service, disclose the name of the product or service, relevant information sufficient for others to identify the scope of innovation, and the period during which other insurance companies may not apply for or provide the same insurance product or service without the consent of the competent authority, so as to facilitate public understanding of the scope of insurance products or services under innovation protection by digital insurance companies. (Article 11 of the Regulations Governing Public Disclosure of Information by Non-life Insurance Enterprises; Article 11 of the Regulations Governing Public Disclosure of Information by Life Insurance Enterprises)
(4) Protection Period for Innovative Products
For a certain period starting from the date the competent authority approves the sale, business trial, or innovative experiment of an innovative insurance product or service, no other insurance company may apply for or handle the same insurance product or service without the consent of the competent authority. (Article 29-1 of the Regulations for Establishment and Administration of Insurance Enterprises)
The above amendments relax the requirements for establishing digital insurance companies, provide operational flexibility, and enhance the protection of innovative insurance products and services. These changes provide a more friendly market environment for digital insurance business.
Our firm has established an "Insurance Practice Group." If you require planning or assessment regarding the establishment process, business plans, or innovative product applications for digital insurance companies, or if you have any questions about the application of relevant regulations, please feel free to contact us.