A Message from the Chairman

The Taiwan Insurance Institute (TII) was established for the purpose of facilitating the sound development of the insurance industry and promoting the interests of insurers, the insured, and the general public. Founded in 1985, TII enters its 35th year in 2020. The past 35 years of accomplishments and on-going efforts have laid a solid foundation on which TII will continue to fulfil its mission. Our principle tasks for the coming years are as follows:

Chairman Hsien-Nung Kuei
 
1.   Set up the Authentication & Validation Platform and the Digital Archive for the Electronic Insurance Policy
 

TII will continue to improve services provided on the platform and via the auxiliary system for the authentication and validation of the electronic Compulsory Automobile Liability Insurance card (e-CALI card). In accordance with supervisory authority policies of digitizing insurance policies, enhancing consumer protection, and protecting the environment through energy conservation and carbon reduction, TII will endeavor to increase the issuance of e-CALI cards as the cards are said to significantly improve the administrative efficiency of CALI operations.

In addition, in line with the supervisory authorities’ promotion of online services in the insurance value chain, including purchase, underwriting, and claims, TII will invite all non–life insurance companies to join TII’s authentication & validation platform and the digital archive of electronic insurance policies. TII’s platform was set up to save on technical costs of issuing electronic insurance policies and to foster a safe, convenient, high efficiency, low-cost, paperless environment for the insurance industry.

2.

Adopt IFRS 17 and ICS
IFRS 17 Insurance Contracts would increase the comparability and transparency of financial statements of insurance companies in international markets. However, in the process of adopting IFRS 17 an insurance company must undertake across-the-board review of the IT systems of various units, including accounting, finance, investment, product design, reinsurance, AML, risk management, and actuarial. Under the instruction of the supervisory authorities and in conjunction with the Accounting Research and Development Foundation, Life and Non–Life Insurance Associations, the Actuarial Institute, the Taiwan Insurance Guarantee Fund, and major accounting firms, TII has established the Taiwan Transition Resources Group (TWTRG) to promote the adoption of IFRS 17. TII will provide local insurers with the necessary assistance to adopt IFRS 17 within the timeframe announced by the supervisory authorities.

On 2 November 2017, the International Association of Insurance Supervisors (IAIS) announced the Insurance Capital Standards (ICS Version 2.0) for Internationally Active Insurance Groups (IAIGs) in an attempt to achieve comparable outcomes across jurisdictions. At that time Taiwan had no IAIGs; nonetheless, as an export-oriented economy, Taiwan requires its insurance industry to be in conformity with international standards so as to cope with changes in the international financial markets. TII will continue to track the field testing, implementation, and subsequent monitoring of ICS Version 2.0. These ongoing efforts are also intended to lead to convergence of current Risk Based Capital (RBC) and the ICS. TII will submit a recommendation report to the supervisory authorities while new insurance solvency requirements are being drafted.

3.

Promote Risk Management and Stress Testing
One major purpose of an insurer’s internal control system is to ensure that management can identify, measure, manage, and control risks while also maintaining adequate capital to address risk exposures and so facilitate the insurer’s sound business operations. TII will continue to promote ERM and ORSA in order to help insurers become better at identifying, measuring, responding to, and controlling risks as well as properly implementing its internal control system’s risk management process. TII will maintain the information exchange channels on ORSA and ERM, including hosting international forums and domestic seminars, so as to promote the risk management culture.

Capital requirements are not the sole basis for assessing an insurer’s financial condition and risks: stress testing should also be used. Under the guidance of the supervisory authorities, TII will promote ongoing stress testing to measure the effect of specific risk scenarios on insurer assets and liabilities. TII will also look at and discuss the revision of the stress testing practices manual after closely examining the risk management development trends among leading supervisory authorities in other countries.

4.

Strengthen Cooperation and Interaction with Insurance Organizations in Asia-Pacific Nations
Overseas expansion helps insurers diversify risk, create more business opportunities, and, above all, cope with a close-to-saturated local market. TII will encourage insurers to focus more on the future development of Asia-Pacific markets, and enhance on-going cooperation with insurance institutions in the region. Expansion in the Asia-Pacific region will both provide overseas Taiwanese enterprises with better services and also enable the Taiwanese insurance industry to expand into markets in the region, including Mainland China.

TII will continue to collect and share information from overseas, reinforce co-operation with insurance institutes and organizations in the Asia-Pacific region, and host international seminars and workshops. We shall continue to encourage Taiwanese insurers to keep an eye on the development of Asia-Pacific nations.

5.

Boost Cultivation of Insurance Professionals and International Talent and Implement Online Training Courses for Insurance Sales Agents
TII will continue to raise public awareness of financial inclusion in insurance and insurance in general. TII will also keep pace with international trends by hosting seminars on topics including FinTech/InsurTech, AML/CFT, legal compliance, corporate governance, IFRS 17, and solvency requirements such as ICS.


In line with our policy of cultivating and training international talent, TII will continue to provide insurance practitioners with international insurance training programs. At the same time, TII will implement mandatory 6-hour legal compliance online training courses for insurance sales agents so as to improve the quality of their service and so forestall insurance disputes.

6.

Implement New Internal Controls and Management and Internal Audit System
It is vital for TII to continue to improve the efficiency of its internal administration, which is the foundation for our ability to draft policy recommendations, produce actuarial and statistical results, and carry out insurance training. TII will continue to update SOPs, MIS, and paperwork processes so as to ensure the quality of our operations and thoroughly implement our updated internal control and management system.

TII will also implement an annual internal audit plan that will help our board of directors and executives to review and evaluate the internal control framework, determine whether it works effectively, and assess the effectiveness of the performance results. The purpose of the internal audit is to ensure the on-going effectiveness of internal controls.

The function of insurance is to enable the losses of those afflicted by misfortune to be spread across the wider society, to compensate losses, and so to maintain a safe, sound, and stable society. By its very nature, therefore, the insurance industry serves the public interest. Under the guidance of the supervisory authorities, TII will continue to promote the sound development of the insurance industry and the interests of the insurers, the insured, and the general public.

Hsien-Nung Kuei

Chairman

 

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