FSC suggests insurance options for youngsters

A media report said that parents are now unable to purchase insurance policies on the Taiwan market for their children aged 15 and under because insurance firms have modified their contracts in accordance with the revision, on Jan. 3.

Schools and welfare organizations have also found no insurance products available for participants in group tours or other outdoor activities like the winter camps.

Some organizations were forced to cancel their scheduled events for the lack of insurance coverage, said the report.

Officials of the Cabinet-level FSC explained that the amendment to Article 107 of the Insurance Law has raised age of policyholders qualified for the payment of claims by one year to 15 from 14 in case of decease.

The main purpose is to lower the moral risks attempted by fraudsters who could purchase policies for their young children and then murder the insured for claims, they said.

However, there are no restrictions concerning the purchase of insurance products to cover medical risks and disabilities for youngsters under age 15.

In order to provide better protection for their children, parents can also purchase other insurance plans, including health and annuity insurance, and pure endowment policies, the officials suggested.

Furthermore, they said the new revision will not apply to liability insurance and people under age 15 are not excluded as the “third parties” in such insurance policies.

As for the mandatory insurance policies required in the existing regulations, including the student safety insurance coverage, will not be affected by the change in the rules either, the officials added.

They said the SFC already asked insurance companies last year to make preparations to cope with the regulation change and continue providing insurance services to the youngsters.

Yet an official at the association formed by insurance firms said most member companies have decided to temporarily suspend the offering of insurance products concerning customers under 15.

He said the acknowledged situation is unlikely to improve before the life insurance companies work out details for their new contracts in coordination with the FSC's Insurance Bureau.

Analysts said the FSC and lawmakers took action to revise Article 107 of the Insurance Law and raise the age of insurants to 15 mainly out of the concern that young children could be victimized by their parents who have come under mounting financial pressures during the periods of economic slowdowns.

The changes prevent insurers from paying customers funeral insurance claims related to insured children under 15. Under the old regulations, the benefits could reach NT$2 million with possible temptations for fraudsters.

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