Taiwan Passes Amendment to Protect Life Insurance Policies from Seizure
Taipei, Taiwan – The Taiwanese government has approved an amendment to the country’s Insurance Act, shielding life insurance policies from seizure by courts in cases of debt. This change aims to provide a crucial safety net for individuals struggling financially.
The amendment stipulates that if the payout from a life insurance policy or other eligible policies falls below 1.2 times the minimum monthly living wage for three consecutive months, it cannot be seized or terminated. This measure is designed to prevent people in financial hardship from losing essential life and health insurance coverage.
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Insurance Bureau (IB) deputy director-general Tsai Huo-yen highlighted the impact of the previous regulations. He explained that under existing rules, the government ordered the termination of approximately 928,000 insurance policies between January 2023 and September 2024. The Supreme Court had previously affirmed the courts’ power to order insurance companies to end these policies for individuals in debt.
“The termination of insurance policies, while helping to repay debts, also meant that the indebted no longer had medical or life insurance covers. It also took up a lot of time and personnel,” Mr Tsai said, describing the negative consequences of the previous system.
Of the terminated policies, about 30% were life insurance, while the remaining 70% were casualty or health insurance policies. Although the Supreme Court’s 2022 ruling specifically addressed life insurance policies, other types of insurance were also affected, leading the IB to recognize the need for reform.
The new amendment addresses a significant issue. According to the IB, around 46,000 policies have been terminated, which has substantially impacted the security that people have built for themselves.
This legal change underscores the government’s commitment to balancing debt recovery with the protection of essential insurance coverage for its citizens.
