The Financial Supervisory Commission (FSC) yesterday eased product approval criteria for a new type of health insurance policy that incentivizes positive health behavior changes by policyholders.
The new product, known as “spillover” policies, provides policyholders with incentives — including reduced premium payments, cash rebates, increased coverage and nonmonetary benefits such as free health examinations — to make lifestyle changes.
The incentives were designed to encourage healthier lifestyles among policyholders, whose progress is tracked by wearable devices and routine health examinations.
As spillover policies do not have an established track record on the global market, deregulation is needed to foster development, the commission said.
However, while the commission supports the intent of the spillover policies, it said there is still a lack of direct correlation between health benefits and lifestyle goals such as walking more than 10,000 steps per day and keeping a regular sleep schedule.
Spillover health insurance products remain a relatively new market segment for insurers worldwide, leaving little precedent for local insurers to follow, it added.
To mitigate these difficulties, the commission said that approval for new spillover policies would be subject to a less stringent approval process.
The relaxed approval rules waive a requirement that insurers support the viability of their product design applications with statistics on the same class of product from the past three to five years, the commission said, adding that such data do not exist.
In the first 10 months of this year, 9,216 spillover policies were sold, contributing total premiums of NT$69.63 million (US$2.31 million), it said.
Five local life insurers are offering seven types of spillover policies, of which policies that offer premium discounts are the most popular, with 8,381 policies sold and NT$58.78 million in premiums collected, it added.
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