Payment only from second year sparks waiting-period dispute
Some life insurance combo policies on the market stipulate that disease coverage and certain other items are payable only from the second policy year, raising concerns over whether this effectively lengthens waiting periods. Under Points 67 and 78 of the Directions for Review of Life Insurance Products, the waiting period for critical illness and cancer insurance shall not exceed 90 days, and for other health insurance at most 30 days. As the payout timing of some policies is longer than current rules, it has drawn discussion.
FSC completes review, stresses review does not mean violation
Deputy Director-General Tsai Huo-yan of the Insurance Bureau, FSC, said that regarding waiting periods for health insurance policies and combo policies containing health insurance, a preliminary review of related policies has been completed, but being reviewed does not mean a violation. As product structures vary, whether any violation is involved still needs internal discussion and clarification, and insurers may be asked to explain if needed. It is currently inconvenient to disclose the number of insurers and policies.
No fine expected if no filing error involved
Tsai Huo-yan said that under Article 30 of the Regulations Governing Pre-sale Procedures for Insurance Products, violations may lead the insurer to be required to suspend the product or revise its terms, and if policyholder rights are harmed, insurers may also be asked to propose remedial measures. However, if insurers were not involved in filing-procedure errors, no fine should be imposed. Most policies under review are file-for-reference products, which are still required to file product documents with the FSC within 15 days after sale, and the Insurance Bureau will examine whether the filed materials violate regulations.
Insurers say it is not a waiting period; most have delisted products
Some life insurers argue that some of these life combo policies combine interest-sensitive products with health insurance for protection and asset inheritance, mainly targeting older policyholders with relaxed underwriting standards. They say the first year was not priced and was disclosed to customers, and consider the time lag not a waiting-period concept. However, during the Insurance Bureau review, most insurers have already delisted the related products. Tsai Huo-yan said regulations do not prohibit combo-policy design, so there will be no situation where interest-sensitive products cannot add health insurance benefits, and insurers also design substandard policies for non-standard applicants.
Bank liquidity under continued FSC monitoring
Separately on market funding conditions, Central Bank data shows the liquidity coverage ratios of 38 domestic banks from Q2 last year to Q2 this year were 129.04% at end-June last year, 129.15% at end-September last year, 134.08% at end-December last year, 122.91% at end-March this year and 122.97% at end-June this year. Deputy Director-General Wang Yun-chung of the Banking Bureau, FSC, said the FSC and the Central Bank continue to monitor banks' liquidity, closely watching related indicators, funding levels and asset-liability allocation, and will also require banks to support financing needs of small and micro enterprises and owner-occupied housing loans.