Chapter 2 Establishment
Article 2
When application is made to establish an insurance company, the company's minimum paid-in capital is NT$2 billion. The capital contributions of promoters and shareholders shall be limited to cash.
Article 3
To establish an insurance company, the promoters shall at the time of application for an establishment permit make share payments equivalent to at least 20 percent of minimum paid-in capital; the payments shall be deposited into a segregated account as set out in Article 7, paragraph 1.
Article 4
The directors, supervisors, and managerial officers of an insurance company shall meet the qualification requirements set out in the Regulations Governing Qualification Requirement and Concurrent Serving Restrictions and Matters for Compliance by the Responsible Persons of Insurance Enterprises (hereinafter referred to as the “Regulations for the Responsible Persons of Insurance Enterprises”). A person to whom any one of the situations set out in Article 3 of those Regulations applies may not act as promoter of an insurance company.
Where a promoter, director, or supervisor is a juristic person, the preceding paragraph shall apply mutatis mutandis to its representative or designated representative performing duties on its behalf.
Article 5
Unless special approval has been granted by the competent authority, an insurance company that has received an establishment permit shall, prior to commencing business operations, have its principal computer systems in operation and ensure that they have passed inspection by the competent authority or an organization designated thereby.
Article 6
To establish an insurance company, the promoters shall submit the following documents, each in triplicate, to apply with the competent authority for an establishment permit:
1. Application form for insurance company establishment permit (format as in Attachment 1).
2. Business plan, specifying the business scope, business principles and policies, and specific implementation methods (including premises and facilities, internal organization and segregation of duties, personnel recruitment and training, business development plan, financial forecasts for the coming five years, and policy on reinsurance).
3. A register of promoters and relevant evidentiary documentation (format as in Attachment 2).
4. Promoters meeting minutes.
5. A statement affirming that none of the disqualifying conditions listed under Article 3 of the Regulations for the Responsible Persons of Insurance Enterprises applies to any of the applicant's promoters or other responsible persons (format as in Attachment 3).
6. Proof that the promoters have made full payment for shares in accordance with the provisions of paragraph 3.
7. An explanation of the sources of the promoters' funds (format as in Attachment 3-1).
8. The offering circular.
9. Documents evidencing the qualifications of the persons expected to be appointed as general manager, assistant general managers, and deputy assistant general managers.
10. Articles of incorporation.
11. Review opinions by a certified public account, a lawyer, and an actuary.
12. The responsibilities of the board of directors, and segregation of duties between the board of directors and management.
13. Other documents as required by the competent authority.
Where the information recorded in the documents referred to in the preceding paragraph is incomplete or insufficient, the application shall be dismissed. If the deficiency can be supplemented or corrected, but this is not done within the time limit set by the competent authority, the application shall be dismissed.
After an insurance company has received its establishment permit, if false information is discovered in any of the documents that it submitted pursuant to paragraph 1 the competent authority may void the permit.
Article 7
To establish an insurance company, a financial institution shall be appointed to collect share capital that is to be deposited into a segregated account opened in the name of preparatory office.
The share capital deposited in the segregated account under the preceding paragraph may not be used before commencement of business. However, the same shall not apply where any of the following circumstances arises after the establishment permit is obtained:
1. The share capital is to be used to purchase fixed assets necessary for business operations and to pay organization costs out of the share capital paid by the promoters, as agreed unanimously by the directors and supervisors elected at a promoters meeting or founders meeting.
2. Incorporation registration for the company has already been completed, and the share capital is to be used to post the bond required in Article 141 of the Insurance Act, or is to be allocated to savings deposits or the purchase of government bonds, treasury bills, negotiable certificates of deposit, banker's acceptances, or commercial paper guaranteed by a financial institution, as provided for in Articles 146 and 146-1 of the Insurance Act.
Article 8
The competent authority may revoke a permit for the establishment of an insurance company if there is any change in promoter prior to the company's incorporation registration. However, this restriction does not apply in any of the following circumstances if the company has filed an application with the competent authority for approval of the change within two weeks after occurrence of the fact:
1. A promoter is missing or dies.
2. A promoter is placed under guardianship by court order.
3. A circumstance set out in Article 3 of the Regulations for the Responsible Persons of Insurance Enterprises is found to apply to a promoter after the application for establishment has been submitted.
4. A promoter, if a company, is subject to a court ruling for reorganization, or otherwise to a material loss of creditworthiness.
For any change other than to a promoter, a report specifying a legitimate reason shall be submitted to the competent authority for approval in advance, except that where circumstances do not allow the report to be submitted for approval in advance, it shall be submitted to the competent authority for approval within two weeks after occurrence of the fact.
Under the circumstances contemplated in the two preceding paragraphs, an insurance company preparatory office that has obtained approval from the competent authority shall insert a conspicuously placed public announcement in a national daily newspaper.
Article 9
To establish an insurance company, the promoters shall make full payment for shares within two months of the date of its establishment permit, and if there is a public offering of shares they shall also act within the aforementioned time period to duly apply to the competent authority for approval of the public offering of shares.
Where a party fails to comply with the provisions of the preceding paragraph or the competent authority does not grant approval, the competent authority may revoke its permit. However, where there is a legitimate reason, such party may apply prior to expiration of the time period set out in the preceding paragraph to the competent authority for a one-month extension.
Article 10
A party seeking to establish an insurance company shall duly apply to the Ministry of Economic Affairs for registration of the company's incorporation within three months of the date on which share payments for its paid-in capital are collected in full.
Where such a party fails to file with the Ministry of Economic Affairs within the required time period, or the Ministry of Economic Affairs does not grant approval, the competent authority may revoke its establishment permit. However, before expiration of the time limit set forth in the preceding paragraph, an application may be filed with the competent authority for an extension if there is a legitimate reason.
Article 11
Within three months from the date on which incorporation registration is completed, a party seeking to establish an insurance company shall duly pay all required fees and submit the following documents attached thereto in triplicate to the competent authority to apply for issuance of a business license.
1. Business license application form (format as in Attachment 4).
2. Company registration documents.
3. Capital verification certificate.
4. Documentary proof that the bond required under Article 141 of the Insurance Act has been furnished.
5. Articles of incorporation.
6. Minutes of promoters meetings or founders meetings.
7. Register of shareholders.
8. Register of directors (format as in Attachment 5) and meeting minutes of the board of directors.
9. Register of managing directors (format as in Attachment 5) and meeting minutes of the board of managing directors.
10. Register of supervisors (format as in Attachment 5) and supervisors reports or meeting minutes.
11. Register of managerial officers, actuaries, underwriters, claims adjusters, general auditors, legal compliance officers, and other key personnel (format as in Attachment 5).
12. Company bylaws and business operating procedures.
13. A statement affirming that none of the disqualifying conditions listed under Article 3 of the Regulations for the Responsible Persons of Insurance Enterprises applies to any of the applicant's promoters or other responsible persons (format as in Attachment 3).
14. An undertaking acknowledging that any party subscribing to more than 15 percent of the total number of shares to be issued is obliged to fill out a source of funds explanation form (format as in Attachment 6).
15. Other documents as required by the competent authority.
Where there is legitimate reason, an application for extension of a deadline specified in the preceding paragraph may be filed prior to the deadline; an extension may not be longer than three months, and shall be limited to one time. If an extension is not approved, the competent authority may revoke the permit.
Article 12
The company bylaws of paragraph 1, subparagraph 12 of the preceding Article shall cover the following matters:
1. Organizational structure and department functions.
2. Staffing, management, and training of personnel.
3. Internal control system.
4. Business principles and policies.
5. Operations manual and segregation of powers and duties.
6. Other matters.
Article 13
After an insurance company receives an establishment permit but before it is issued a business license, if any of the following circumstances arises with respect to the company, the competent authority will not issue a business license:
1. A circumstance set out in Article 3 of the Regulations for the Responsible Persons of Insurance Enterprises is found to apply to a promoter after the application for establishment has been submitted.
2. A responsible person does not meet the qualification requirements set out in the Regulations for the Responsible Persons of Insurance Enterprises.
3. A director or supervisor violates the provisions of the Regulations for the Responsible Persons of Insurance Enterprises.
4. The company is not in compliance with the provisions of Article 5.
5. The company fails to furnish a required document.
6. Other circumstances exist that the competent authority believes pose a likelihood that the company will not be able to operate insurance business in a sound and effective manner.
Article 14
The competent authority shall revoke the establishment permit granted to an insurance company that fails to commence its business operations within a period of six months following issuance of the business license, require the company to surrender the business license for cancellation within a specified time period, and issue a notice to the Ministry of Economic Affairs. However, where there is legitimate reason and the competent authority has granted approval, an extension may be granted; the period of extension shall be no longer than six months, and shall be limited to one time.
Article 15
With respect to matters related to the establishment of an insurance company, the competent authority may from time to time appoint personnel to conduct audits (or request that an appropriate agency appoint personnel to do so), and may further order the party applying to establish the insurance company to act within a specified time period to submit necessary documents and information or to designate personnel to appear before the competent authority and provide explanations.
Article 16
A party seeking to establish an insurance company may simultaneously apply to establish branches.
The number of branches referred to in the preceding paragraph, and the areas of their location, shall be reviewed and approved by the competent authority on the basis of the company's business plan, staffing, area conditions, and other such factors.