Following a ruling by the Supreme Court in 2022 that insurance policies can be subject to compulsory enforcement, the number of enforcement cases has sharply increased. In response to this issue, the Financial Supervisory Commission (FSC) stated on the 9th that it will consider amending the “Insurance Act,” and the Legislative Yuan’s Judiciary and Legal Affairs Committee has passed a temporary proposal, requesting the Judicial Yuan to work with relevant agencies to establish the “Guidelines for Compulsory Enforcement of Insurance Policies.”
According to a written report from the Judicial Yuan, since the Supreme Court’s ruling, the number of creditors applying to the courts for compulsory enforcement to check the life insurance policies of debtors has significantly increased. From January 1, 2023, to March 2024, a total of 234,090 inquiries were made by various enforcement courts regarding the insurance coverage of debtors.
The Judicial Yuan reported that at least 34,680 seizure orders were issued, and a total of 8,712 execution orders were issued to terminate the life insurance contracts of debtors as the insured. The courts are facing a heavy burden in handling these cases, becoming a severely affected area.
In a written report, the FSC pointed out that in order to fundamentally solve the problems arising from the compulsory enforcement of life insurance contracts, amendments to the “Insurance Act” will be considered. Key points include specifying that health insurance and other types of protection-oriented insurance contracts are not subject to compulsory enforcement, and incorporating a beneficiary intervention system based on foreign legal systems.
During the meeting of the Legislative Yuan’s Judiciary and Legal Affairs Committee, legislators such as Chung Chia-pin, Chuang Jui-hsiung, Chen Chun-yu, Wu Ssu-yao, Wu Tzong-shian, Lin Chu-yin, and Lo Chih-chiang proposed a temporary resolution.
The temporary proposal outlined that in order to balance the rights of creditors, debtors, and other stakeholders, safeguard insurance coverage, and exclude certain categories based on policy types, the Judicial Yuan is requested to collaborate with the FSC’s Insurance Bureau, the Executive Yuan’s Department of Legal Affairs, and the Life Insurance Association in setting guidelines for compulsory enforcement, including establishing a threshold for exemption from surrender value and claim payouts below a certain amount.
Lo Chih-chiang inquired about the specific threshold amount, to which FSC Insurance Bureau Director, Shih Chiung-hua, responded that the discussion is ongoing. Initial talks focused on surrender value and had not yet addressed claim payouts, with the amount likely being around 100,000 NT dollars. Compulsory enforcement would apply only for amounts exceeding this threshold, with the condition that certain insurance types like accident and health insurance are excluded, and for general savings-oriented policies, an exemption below a certain amount would be applied.
Finally, with no objections from attending legislators, the proposal was smoothly approved by the committee.