The Financial Supervisory Commission (FSC) yesterday reiterated a warning that insurers must contain runaway costs and seek sustainable policy sales growth.
Recent studies found that insurance policy sales have been burdened with excessive costs, including commission and bonuses paid to banks tasked with promoting the products, the commission said.
FINED
“The number of offending companies we uncovered was more than expected,” Insurance Bureau Deputy Director-General Shih Chiung-hwa (施瓊華) said, adding that such companies have been fined for their infractions.
Insurers decide the methods by which insurance policy costs are recognized, resulting in vast differences among carriers, Shih said.
Shih said that the bureau is in talks with the Life Insurance Association of the Republic of China (壽險公會), which is to form a more standardized approach to recognizing fees so that companies can meet regulatory guidelines.
“We urge companies to demonstrate greater restraint and implement improved self-regulatory efforts,” Shih said. “No policy should be designed in a way that does not cover relevant costs.”
The bureau earlier said that policy products’ commissions, bonuses and operating costs must not exceed a premium loading — the amount an insurer needs to cover expenses and generate profit.
The bureau also warned insurers to refrain from raising prices in response to heightened scrutiny on how they control costs.
Total first-year premiums collected by insurers in the first five months was tallied at NT$449.21 billion (US$13.85 billion), 15.6 percent higher than the same period last year, Life Insurance Association statistics showed.
The data showed that banking channels accounted for about 49.83 percent of sales, while insurers’ own sales agents made up 44.46 percent.
With banks’ sales commissions averaging between 3 percent and 5 percent, they have received a windfall of more than NT$10 billion from insurers, the data showed.
“From what we have seen, a number of insurers have been paying commission of between NT$5 and NT$7 to banks for every NT$3 they earn in policy sales,” said an Insurance Bureau official, who asked not to be named.
EXCURSION BAN
Measures to be implemented include a 30 percent cut in commissions, reduced bonuses and the banning of paid excursions abroad for top performing salespeople, the commission said.
The regulatory change is likely to affect smaller-sized organizations and salespeople specializing in traditional life insurance and single-pay products.
At the same time, industry observers have said that banks are increasingly concerned about a rise in the number of online insurance sales channels, in light of NT$15 million worth of interest-sensitive annuity insurance products China Life Insurance Co (中國人壽) sold at much lower commission costs through its online channel last month.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”