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Chapter Law Content

Title: Regulations Governing Insurance Brokers CH
Category: Financial Supervisory Commission(金融監督管理委員會)
Chapter 3 Registration of Business Practice and Application for Practice License
Article 7
A person possessing a broker qualification as set out in these Regulations and free of the situations provided in any subparagraph of paragraph 3 of the preceding article and subparagraph 26 of Article 49, after obtaining a practice license, practice business independently or as an employee of a corporate a broker company organization or a bank.
A broker company and a bank shall employ at least one broker to serve as a signatory, and carry out registration of permission with the competent authority. The broker company and bank shall make appropriate adjustments to the number of such persons according to the scale of its business and the number of the insurance solicitor. When necessary, the competent authority also may require the broker company or bank to employ additional brokers to serve as signatories.
After completing the registration of permission set out in the preceding paragraph, it shall duly carry out registration of incorporation with the appropriate competent authority in charge of company registration.
An independent broker and a broker employed by a broker company or a bank can’t serve as a signatory for other broker companies, insurance agent companies, insurance surveyor companies or banks concurrently.
Article 8
An independent broker shall submit the following documents to carry out registration of permission with the competent authority:
1. An application form.
2. Certification showing that the qualification requirements set out in these Regulations are met.
3. Certification of pre-job training, obtained within the last year and recognized by the competent authority; for a broker whose certification of pre-job training was obtained one year or earlier, the already obtained certification of pre-job training along with certification of at least 16 hours of on-the-job training within the last year; where registration of permission is based on the qualifications set out in subparagraph 3, paragraph 1 of Article 5 herein, certification of at least 16 hours of on-the-job training within the past 1 year before submission of the application. For brokers who submit certification of at least 16 hours of on-the-job training within the past 1 year, the courses on laws and regulations taken shall not be less than 8 hours.
4. Proof of identity.
5. A business plan.
6. A written statement undertaking the absence of situations provided in paragraph 3 of Article 6 and subparagraph 26 of Article 49.
7. Other documents as required by the competent authority.
The business plan in subparagraph 5 of the preceding paragraph shall contain at least the following information:
1. Business philosophy and methods for carrying out fiduciary duties;
2. Scope of business;
3. Business development plan;
4. Business solicitation system and procedures;
5. Financial projections for the next three years;
6. Description of work place and equipment; and
7. Other information as required by the competent authority.
Where the information stated in the documents referred to in paragraph 1 hereof is incomplete or insufficient, the application will be rejected; if the situation may be remedied, the applicant shall take remedial actions within the time limit set by the competent authority, or else the application will be rejected.
After an independent broker has obtained a permit, the competent authority may void the permit if false information is discovered in any of the documents under paragraph 1 hereof submitted by the applicant.
Article 9
A broker company shall operate its business as a specialized operation and include the wording “Insurance broker” in the name of the company.
A broker company applying to operate insurance broker business, reinsurance broker business, or simultaneously insurance broker business and reinsurance broker business shall submit the following documents to the competent authority for registration of permission:
1. An application form.
2. A photocopy of the valid practice license of brokers employed or certification showing that brokers employed meet the qualification requirements set out in these Regulations and any of the following certifications:
(1) Certification of pre-job training, obtained within the last year and recognized by the competent authority;
(2) For a broker whose certification of pre-job training was obtained one year or earlier, the already obtained certification of pre-job training and the certification of at least 16 hours of on-the-job training within the past 1 year before submission of the application. For brokers who submit certification of at least 16 hours of on-the-job training within the past 1 year, the courses on laws and regulations taken shall not be less than 8 hours.
(3) Where registration of permission is based on the qualifications set out in subparagraph 3, paragraph 1 of Article 5 herein, certification of at least 16 hours of on-the-job training within the last year. For brokers who submit certification of at least 16 hours of on-the-job training within the past 1 year, the courses on laws and regulations taken shall not be less than 8 hours.
3. Proof of identity for brokers employed.
4. A written statement by the designated chairman, general manager and brokers employed that they are free of the situations in subparagraphs 1 through 9 and subparagraphs 12 through 19 of paragraph 1, Article 6 herein.
5. A business plan.
6. A list of promoters or shareholders stating each promoter's or shareholder's name, date of birth, domicile, ID number, and amount paid for subscription/purchase of shares.
7. The Articles of incorporation.
8. Proof of full payment for shares or proof of the balance of deposits of the company.
9. Documents evidencing the qualifications of the designated chairman and general manager.
10. Other documents as required by the competent authority.
The business plan in subparagraph 5 of the preceding paragraph shall contain at least the following information:
1. Company philosophy and methods for carrying out fiduciary duties;
2. Scope of business;
3. Business development plan;
4. Organizational Structure and job duties.
5. Business solicitation system and procedures;
6. Financial projections for the next three years;
7. Description of work place and equipment; and
8. Other information as required by the competent authority.
Where any of the promoters or shareholders referred to in subparagraph 6 of the paragraph 2 is a foreign insurance broker institution, the documents set out in subparagraphs 2 through 4, subparagraphs 11 and 12, paragraph 1 of Article 55 shall also be submitted.
A broker company applying to operate reinsurance broker business, or simultaneously insurance broker business and reinsurance broker business shall proceed in accordance with the provisions of Paragraph 2 hereof, and in addition, submit documents evidencing the qualifications of manager to be in charge of reinsurance broker business; its business plan shall also contain a planning for operating processes that comply with the requirements set forth in Articles 35 and 37 herein.
When a broker company that has been approved by the competent authority to operate insurance broker business applies to the competent authority for permission to add reinsurance broker business to its operations, it shall submit the following documents:
1. An application form;
2. The proof of the deposit of bond, paid-in capital and a duplicate of an insurance policy showing the purchase of professional liability insurance;
3. Documents evidencing the qualifications of the manager in charge of reinsurance broker business.
4. The minutes of the relevant board of directors' or shareholders' meeting.
5. A business plan.
6. The financial report for the latest one year, audited and attested by a certified public accountant.
7. Other information as required by the competent authority.
The business plan in subparagraph 5 of the preceding paragraph shall contain at least the following information:
1. Company philosophy and methods for carrying out fiduciary duties;
2. Scope of business;
3. Business development plan;
4. Organizational Structure and job duties.
5. The operating process is in compliance with paragraphs of Article 35 and Article 37 herein;
6. Financial projections for the next three years;
7. Description of work place and equipment; and
8. Other information as required by the competent authority.
When a broker company that has been approved by the competent authority to operate reinsurance broker business applies to the competent authority for permission to add insurance broker business to its operations, the provisions of Subparagraphs 1, 2, 4 ~ 7 of Paragraph 6 hereof apply mutatis mutandis the required documentation.
Where the information stated in the documents referred to in Paragraph 2, 5, 6 hereof or the preceding paragraph is incomplete or insufficient, the application will be rejected; if the situation may be remedied, the applicant shall take remedial actions within the time limit set by the competent authority, or else the application will be rejected.
After a broker company has obtained a permit, the competent authority may void the permit if false information is discovered in any of the documents under Paragraph 2, 5, 6 or 8 hereof submitted by the applicant.
Article 10
A bank that applies for approval to operate concurrently insurance broker business or to increase the types of business shall comply with the provisions of the following subparagraphs:
1. The ratio of regulatory capital to risk-weighted assets within the past year meets the requirement set out in Article 5 of the Ratio of Regulatory Capital to Risk-weighted Assets Regulations Governing the Capital Adequacy and Capital Category of Banks;
2. Having not been imposed disciplinary action by the competent authority pursuant to subparagraphs 1 ~ 5, paragraph 1, Article 61-1, or paragraph 1, Article 62 of the Banking Act, or paragraph 1, Article 164, or Articles 167-2 ~ 167-4 of the Insurance Act within the past half year; or if there has been any violation, having made concrete improvements recognized by the competent authority; and
3. Not having any material deficiency or irregularity in the implementation of internal controls within the past year; or having made concrete improvements recognized by the competent authority.
Article 11
A bank applying to operate insurance broker business or increase of the type of business shall submit the following documents to the competent authority for registration of permission:
1. An application form.
2. A photocopy of its business license.
3. Articles of incorporation or equivalent documentation.
4. The minutes of the board of directors or trustees meetings.
5. The list of directors (council members) and supervisors.
6. A photocopy of the valid practice license of brokers employed or certification showing that brokers employed meet the qualification requirements set out in these Regulations and any of the following certifications:
(1) Certification of pre-job training, obtained within the last year and recognized by the competent authority;
(2) For a broker whose certification of pre-job training was obtained one year or earlier, the already obtained certification of pre-job training and the certification of at least 16 hours of on-the-job training within the past 1 year before submission of the application. For brokers who submit certification of at least 16 hours of on-the-job training within the past 1 year, the courses on laws and regulations taken shall not be less than 8 hours.
(3) Where registration of permission is based on the qualifications set out in subparagraph 3, paragraph 1 of Article 5 herein, certification of at least 16 hours of on-the-job training within the last year. For brokers who submit certification of at least 16 hours of on-the-job training within the past 1 year, the courses on laws and regulations taken shall not be less than 8 hours.
7. Proof of identity for brokers employed.
8. A written statement by the designated department head, department deputy head and brokers employed undertaking that they are free of the situations in subparagraphs 1 through 9 and subparagraphs 12 through 19 of paragraph 1, Article 6 herein.
9. A business plan.
10. Documentary proof evidencing allocation of operating capital.
11. Documents evidencing the qualifications of the designated department head, department deputy head.
12. Other documents as required by the competent authority.
The business plan in subparagraph 9 of the preceding paragraph shall contain at least the following information:
1. Company philosophy and methods for carrying out fiduciary duties;
2. Scope of business;
3. Business development plan;
4. Organizational Structure and job duties.
5. Business solicitation system and procedures;
6. Financial projections for the next three years;
7. Description of work place and equipment; and
8. Other information as required by the competent authority.
Where the information stated in the documents referred to in paragraph 1 hereof is incomplete or insufficient, the application will be rejected; if the situation may be remedied, the applicant shall take remedial actions within the time limit set by the competent authority, or else the application will be rejected.
After a bank has obtained a permit, the competent authority may void the permit if false information is discovered in any of the documents under paragraph 1 hereof submitted by the applicant.
Article 12
A broker company shall have one general manager in charge of managing the overall operations of the company and shall not have other officers in comparable position.
The general manager referred to in the preceding paragraph shall not act concurrently as the chairman or general manager of other broker companies or insurance agent companies.
The general manager of a broker company shall possess one of the following qualifications:
1. Has graduated from a domestic or foreign school at the level of junior college or higher or possessing equivalent academic qualifications, and having no less than five years of experience working for an insurance company, insurance cooperative, broker companies, insurance agent companies, or insurance surveyor companies and having the qualification of solicitor, agent or broker for same type of insurance business;
2. Has graduated from a domestic or foreign school at the level of junior college or higher or possesses equivalent academic qualifications, and has served for no less than five years as a signatory for an insurance broker; or
3. Has the qualification of solicitor, agent or broker for same type of insurance business and there is other factual evidence sufficient to show professional insurance expertise or insurance work experience that enables him or her to operate an insurance broker business soundly and effectively.
The appointment or dismissal of the general manager mentioned in the preceding paragraph shall be duly registered with the competent authority in charge of company registration.
The managerial officer of a broker company in charge of its reinsurance broker business shall have graduated from a domestic or foreign school at the level of junior college or higher or possess equivalent academic qualifications, and have not less than three years of work experience in reinsurance business.
Article 13
The chairman of a broker company, at least one third of its directors and supervisors, sales-related vice general manager, managers of branch offices or officers in comparable positions shall possess one of the following qualifications:
1. Has graduated from a domestic or foreign school at the level of junior college or higher or possesses equivalent academic qualifications, and has no less than three years of insurance company, insurance cooperative, broker company, insurance agent company, or insurance surveyor company work experience.
2. Has graduated from a domestic or foreign school at the level of junior college or higher or possesses equivalent academic qualifications, and has served for no less than two years as a signatory for an insurance broker.
3. There is other factual evidence sufficient to prove professional insurance expertise or insurance work experience, and capability for safe, sound, and effective operation of an insurance broker business.
Besides possessing the qualification mentioned in the preceding paragraph, sales-related vice general managers, managers of branch office or officers in comparable positions shall also have the qualification of solicitor, agent or broker for same type of insurance business.
Article 14
Where there is a change of chairman, director, supervisor, general manager or managers of branch office, a broker company shall submit a written statement by the new appointee undertaking that who is free of situations set out in any of the subparagraphs of paragraph 1, Article 6 and documents evidencing compliance with qualifications provided in the preceding two articles to the brokerage association for recordation within fifteen days after the change.
A broker company shall report changes to place of business or paid-in capital to the brokerage association for recordation within fifteen days after registration of the change (with the appropriate authority); the preceding paragraph applies when an independent broker or a bank changes his or her place of business.
The directions for the reporting operations set out in the preceding two paragraphs shall be drawn up by the brokerage association and brokers association, and submitted to the competent authority for recordation; the preceding provision shall apply to any amendment to those directions.
Article 15
When a broker employed by a broker company and a bank ceases to serve as a signatory for the company, the broker company and bank shall, within fifteen days after the employed broker departs, report to the competent authority and surrender the practice license of the departed broker, and report same to the brokerage association for recordation.
When a broker company and a bank employs an additional broker or changes a broker, and such new broker already has a practice license, the broker company and bank shall report to the brokerage association for recordation within seven days after employing the additional broker or changing the broker.
The brokerage association shall prescribe directions for the reporting operation under the two preceding paragraphs.
Article 16
A broker company shall have minimum paid-in capital of NT$5 million; one applying to operate reinsurance broker business shall have minimum paid-in capital of NT$10 million; one applying to simultaneously operate insurance broker business and reinsurance brokering business shall have minimum paid-in capital of NT$10 million. The capital contributions of promoters and shareholders shall be limited to cash.
A broker company already being granted practice license before the amended Regulations are in force on June 24, 2014 shall adjust its capital in accordance with the requirement set out in the preceding paragraph before June 24, 2019.
Article 17
A bank shall allocate at least NT$30 million as operating capital. The operating capital shall be used exclusively for the insurance broker business and may not be used for other purposes.
A bank already being granted practice license to engage in non-life insurance broker business related to documentary credit negotiation and credit extension before the amended Regulations are in force but not meeting the requirement set out in the preceding paragraph shall adjust its capital to become compliant within three years from the date the amended Regulations enter into force.
Article 18
Upon applying to the competent authority for the issuance of a practice license, an independent broker shall pay the fees set by the competent authority and submit the following documents:
1. An application form.
2. The proof of the deposit of bond, a duplicate of an insurance policy showing the purchase of professional liability insurance and bonding insurance.
3. Certification showing membership in the brokers association in accordance with Article 45.
4. Other documents as required by the competent authority.
Article 19
Upon applying to the competent authority for the issuance of a practice license, a broker company shall pay the fees set by the competent authority and submit the following documents:
1. An application form;
2. The proof of the deposit of bond and a duplicate of an insurance policy showing the purchase of professional liability insurance;
3. Company registration form and a list of directors, supervisors and general manager;
4. A written statement by directors and supervisors undertaking that they are free of the situations set out any of the subparagraphs of paragraph 1, Article 6 and proofs submitted by its chairman and general manager that they are free of the situations set out in subparagraphs 10 and 11 of paragraph 1, Article 6 herein, and employed brokers are free of the situation set out in subparagraph 26, Article 49 herein;
5. Certification showing membership in the insurance brokerage association in accordance with Article 45 herein; and
6. Other documents as required by the competent authority.
Article 20
Upon applying to the competent authority for the issuance of a practice license to operate insurance broker business, a bank shall pay the fees set by the competent authority and submit the following documents:
1. An application form;
2. The proof of the deposit of bond and a duplicate of an insurance policy showing the purchase of professional liability insurance and bonding insurance;
3. A list of the department head, department deputy head.
4. A written statement by department head and department deputy head undertaking that they are free of the situations set out any of the subparagraphs of paragraph 1, Article 6 and proofs submitted by employed brokers are free of the situation set out in subparagraph 26, Article 49 herein;
5. Certification showing membership in the insurance brokerage association in accordance with Article 45 herein; and
6. Other documents as required by the competent authority.
Article 21
A Bank that applies to the competent authority for registration to operate insurance broker business shall establish a separate department for such operations with independent operations and accounting.
Paragraphs 1 and 5 of Article 6, paragraphs 1 ~ 3, 6 of Article 12, paragraph 1 of Article 14 and Article 60 herein shall apply mutatis mutandis to the head of department described in the preceding paragraph; and paragraphs 1 and 4 of Article 6, Article 13 and Article 60 herein shall apply mutatis mutandis to the deputy head of department.
Article 22
A broker who possesses the qualifications of both non-life insurance broker and personal insurance broker may concurrently apply for broker practice licenses for both non-life insurance and personal insurance.
Article 23
Independent brokers, broker companies and banks shall apply to the competent authority for issuance of a practice license and commence practicing or operating business within six months of the date of registration of permission. If the surveyor has not yet applied or has not yet commenced practice or operation at the end of this period, the competent authority will revoke its permission.
Article 24
The practice license of independent brokers and brokers employed by a broker company and a bank is valid for a period of five years. A broker may not practice business unless he or she has completed the procedures for license renewal before the current practice license expires.
Upon applying for renewal of practice license, a broker shall pay the fee set by the competent authority and submit the following documents:
1. The original practice license.
2. Certification of on-the-job training recognized by the competent authority.
3. The proof of the deposit of bond, a duplicate of an insurance policy showing the purchase of professional liability insurance and bonding insurance.
4. The consolidated income tax returns of the broker (listing sources of income) for the past three years, tax withholding statements accompanied by an affidavit, or other documents proving that he or she has actually practiced the business.
5. A written statement by the applicant undertaking that who is free of the situations set out of the paragraph 3 , Article 6 and subparagraph 26, Article 49 herein.
6. Certification showing membership in brokers association or brokerage association in accordance with Article 45.
7. Other documents as required by the competent authority.
Article 25
The competent authority may not renew a practice license if the applying broker has any of the following circumstances:
1. Violate paragraph 2 of Article 165 of the Insurance Act.
2. Any of the circumstances listed in paragraph 3 of Article 6 or subparagraph 26, Article 49 herein.
3. Violation of paragraph 2 or 4 of Article 7 herein.
4. Failure to apply for renewal of the practice license within the time limit specified in paragraph 1 of preceding article.
5. Failure to file business and financial statements in accordance with Article 43.
6. Other circumstances as provided by the competent authority.
Article 26
An independent broker who ceases business shall, within fifteen days after the fact, file a report with the competent authority and surrender his or her practice license.
Article 27
A broker company having any of the following situations shall submit an application together with its board of directors’ or shareholders’ meeting minutes to the competent authority for approval and register with competent authority in charge of company registration to law:
1. Suspending.
2. Resuming business.
3. Dissolved.
A broker company may suspend its business up to one year, and where there is legitimate reason, may apply for an extension of business suspension period once. The application for extension shall be made fifteen days before the allowed suspension period expires.
Where a broker company fails to apply for business resumption and employ a broker to serve as a signatory in accordance with Article 7 before the allowed suspension period expires, the competent authority will revoke its permission and cancel its practice license.
Where a broker company applies for business suspension, it shall surrender the practice licenses of brokers employed by the company. Where a broker company applies for dissolution, it shall surrender the practice licenses of brokers employed by the company as well as the company’s practice license.
Where a broker company has a situation set out in subparagraph 1 or 3 of paragraph 1 hereof or cancel its practice license by the competent authority but fails to surrender the practice licenses of brokers employed by the company, the employed brokers shall, within thirty days from business suspension or dissolution of the broker company or cancel its practice license by the competent authority, submit relevant documents to competent authority for cancellation of registration through the brokerage association.
A broker company operating simultaneously insurance broker business and reinsurance broker business that ceases the operation of its insurance broker business or reinsurance broker business shall submit the minutes of its board of directors or shareholders meeting to the competent authority for recordation within one month.
Article 28
A bank that applies to suspend or terminate its insurance broker business in part or in whole shall describe reasons therefor and submit an application form and the minutes of its board of directors’ meeting to the competent authority for approval.
A bank that applies to suspend its insurance broker business shall surrender the practice licenses of brokers employed by it. A bank that applies to terminate its insurance broker business shall surrender the practice licenses of brokers employed by it and its practice license for operating concurrently insurance broker business.
A bank that has been approved by the competent authority to suspend or terminate its insurance broker business in part or in whole, or has its business permit revoked or voided and its practice license for operating concurrently insurance broker business cancelled but fails to surrender the practice licenses of brokers employed by it, the employed brokers should, within thirty days from the date the competent authority approves the bank to suspend or terminate its insurance broker business in part or in whole, or from the date the competent authority cancels the bank’s practice license for operating concurrently insurance broker business, submit relevant documents for registration cancellation through the brokers association.
The directions for operation of cancellation registration mentioned in the paragraph 5 of preceding article and preceding paragraph shall be drawn up by the brokerage association.
Article 29
An independent broker may apply for return of the bond after who has ceased practice and its practice license has been surrendered and cancelled, or after its business permit has been voided or revoked by the competent authority.
The bond deposited by a broker company will be returned upon duly made application only after liquidation of the company is completed according to law, and the practice license is surrendered and cancelled; provided,
The bond deposited by a bank will be returned upon duly made application after the bank has terminated its insurance broker business with approval of the competent authority and surrendered its practice license, or after its business permit has been revoked or voided by the competent authority.
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