Life insurance companies lobby for favorable legislation
By John Liu ,The China Post
May 17, 2014, 12:06 am TWN
TAIPEI, Taiwan -- It was recently exposed in the media that life insurance companies have lobbied caucus whips in the Legislature, seeking assistance in passing favorable clauses without deliberation in a normal proceeding.
The Ministry recently rolled out a package intending to beef up the country's financial structure. A measure in the package to adjust business tax has been preliminarily approved, and it is now awaiting approval in the Legislature.
The measure increases the tax rate applied to insurance companies from 2 percent to 5 percent. However, there appeared to be some disagreement in regard to applicable deductibles. Insurance companies allegedly sought help from caucus whips to rush through controversial clauses without deliberation in the Legislature.
As the government raises the tax rate to 5 percent, insurance companies will be paying NT$4 billion in additional taxes per year. The Life Insurance Association argued that more taxes will extend the time period required for certain insurers to turn profitable.
A Sneaky Process
Legislative sessions will draw to a close on May 31. Controversial clauses tend to be rushed through sessions in this period. This procedure, however, does have some merits from a lawmaker's perspective.
Under normal proceedings, legislation needs to be deliberated by both political parties in the House, but this often results in the delay of new legislation's passage. In addition, exposure of legislation undergoing deliberation will also attract public attention, which may further complicate the issue.
As such, some lawmakers have resorted to a “sneakier” approach whereby amendments to legislation are made and signed by lawmakers without any deliberation. Sources say lawmakers from both the Kuomintang (KMT) and the Democratic Progressive Party (DPT) have exercised this approach over the years.
Finance Minister Disapproves
DPP caucus whip Ker Chien-ming (柯建銘) has confirmed that the Life Insurance Association indeed sought his help. Ker said however, that it is the KMT that should take care of this issue, for the lobbyist was in fact a former KMT legislator.
According to KMT first deputy caucus whip Alex Fei (費鴻泰), the Life Insurance Association should follow normal proceedings and submit their proposal to the Legislative Finance Committee instead of seeking help from DPP caucus whip or Legislative Yuan Speaker Wang Jin-pyng (王金平). To pass legislation via their signatures only is not acceptable, Fei said.
In regard to the latest development, Finance Minister Chang Sheng-ford (張盛和) said he does not approve of this type of “last minute” adjustment, as the new clause has been reviewed and preliminarily approved by the Finance Committee.