The Financial Supervisory Commission (FSC) has fined China Life Insurance Co (中國人壽) NT$1.5 million (US$48,228) over breaches of the Insurance Act (保險法), as the insurer failed to determine that clients had insured employees without their consent, the agency said yesterday.
Taipei-based China Life sold three interest-sensitive annuity policies to one corporate client, which claimed it bought the products as part of retirement plans for employees, Insurance Bureau Deputy Director-General Chang Yu-hui (張玉煇) told a news conference.
However, the client failed to confirm with its employees if they agreed to be insured and did not ask the policyholders to submit documents regarding employee benefits, contravening regulations governing business solicitation, policy underwriting and claim adjustment by insurance enterprises, Chang said.
Insurance companies should check the holder’s purpose for the policy and whether those to be insured have given their consent before the purchase, she said.
China Life also sold three savings insurance policies to another two corporate clients, which said that they wanted to insure important employees to avoid losses if they were hurt in an accident, Chang said.
“The clients’ claims were not true. They should have purchased protection policies, such as injury or life insurance, rather than policies linked with wealth management, but China Life failed to detect the discrepancy,” Chang said.
China Life was fined NT$600,000 for the sales to the three companies.
Usually, if companies offer retirement savings, group annuities are used as an incentive to retain employees, Chang said.
After group annuities were approved by the regulator in June 2016, six life insurers had sold such products to 162 companies as of the end of May, with cumulative premiums totaling NT$1.13 billion, the commission said.
China Life was fined another NT$900,000 over breaches of regulations governing transactions with interested parties, Chang said.
China Life let a director attend a board meeting, despite the director having a conflict of interest — an issue that was discussed at the meeting — she said.
China Life said it has reviewed its marketing program and would make adjustments, China Life president Stephanie Hwang (黃淑芬) said in a regulatory filing with the Taiwan Stock Exchange.
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