These Regulations are adopted pursuant to Paragraph 3,Article 165 of the Insurance Act (hereinafter referred to as the Act).

Insurance agent companies and insurance broker companies that are public companies or companies with annual operating revenue of NT$200 million or more shall establish internal control and audit systems as well as business solicitation system and procedures within the following year.
Banks shall establish internal control, audit system and business solicitation system and procedures in accordance with these Regulations.
The operating revenue referred to in these Regulations shall be the operating revenue as defined in Article 5 of the Financial Supervisory Commission Regulations Governing Fee Schedule for Annual Supervision Fee, Examination Fee and Fee Collection.
The term “bank” as used in these Regulations means a bank operating concurrently insurance agent business or insurance broker business with approval of the competent authority.

The term “internal control and audit system and business solicitation system and procedures” referred to in these Regulations are management processes defined by the management, approved by the board of directors (council) and implemented by the board of directors (council), the management and other employees for the purpose of promoting sound operations of the company to reasonably ensure that the following objectives are achieved:
1. Effectiveness and efficiency of operations.
2. All transactions take place under proper authorization.
3. Enhancing the skills of insurance solicitors, treating all consumers fairly and soliciting business in an explicit, fair and reasonable manner.
4. Premiums and related expenses collected from or turned in on behalf of policy proposers are safeguarded.
5. Financial and other records provide reliable, timely, transparent, complete, accurate and verifiable information and comply with relevant rules and regulations.
6. Compliance with applicable laws and regulations.

The internal control and audit system and business solicitation system and procedures of insurance agent companies, insurance broker companies or banks shall be passed by its board of directors (council), and, if any director has a reservation or dissenting opinion, the company shall state such director’s opinion and reasons in the board of directors (council) meeting minutes, and shall send the minutes together with the internal control, audit and business solicitation system and procedures passed by the board of directors (council) to each supervisor(board of supervisors) or audit committee ; the same shall apply to any amendment thereto.
If an insurance agent company, insurance broker company or bank has established an audit committee, the adoption of or any amendment to the internal control and audit systems as well as solicitation systems and procedures shall be approved by its audit committee with the consent of one-half or more of audit committee members and submitted to its board of directors (council) for a resolution.
If the adoption or amendment under the preceding paragraph is not approved by the audit committee, it may be done with the approval of at least two-thirds of the entire board of directors (council), and the resolution of the audit committee shall be recorded in the minutes of the board of directors (council) meeting.