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Chapter 1 General Principles
Article 1
This Act is enacted to establish an agricultural
insurance system, make up for losses sustained by the
agriculture, forestry, fishery and animal industry
businesses from natural disasters, strengthen
protection for agricultural operations and stabilize
the income for farmers.
Article 2
The term “competent authority” as used in this Act
means the Council of Agriculture of the Executive
Yuan.
Article 3
The terms as used in this Act are defined as follows:
1.“Agricultural insurance” means an insurance
coverage that is announced by the competent
authority to make up for actual or presumed
losses caused by natural disasters or other
events to the subject matter insured.
2.“Subject matter insured” means an item related
to a product of the agriculture, forestry,
fishery or animal industry business.
3.“Insurance enterprise” means an entity approved
by the Financial Supervisory Commission that has
been established and registered in accordance
with the law to engage in the insurance business.
4.“Insurer” means an insurance enterprise and a
farmers’ or fishermen’s association that has a
right to claim a premium upon entering into an
agricultural insurance contract and is liable
for indemnification in accordance with the
contracted insurance obligations when an insured
hazardous incident occurs.
5.“Proposer” means a person having an insurable
interest in the subject matter insured who applies
with an insurer to enter into an agricultural
insurance contract and is obliged to pay a
premium.
6.“Insured” means a person actually engaged in
agriculture, forestry, fishery or animal industry
business who, upon incurring damage as a result of
an insured incident, enjoys the right to claim
indemnification. A proposer may also be the
insured.
Article 4
The insurer shall conduct agricultural insurance
business in accordance with the provisions of this Act.
Matters not provided in this Act shall be governed by
provisions of the Insurance Act for insurance
enterprise.
The provisions of Chapter 1 to 3 of the preceding act
shall apply mutatis mutandis to a farmers’ or
fishermen’s association.
Chapter 2 Promotion of Agricultural Insurance
Article 5
The competent authority may elect the subject matter
insured and conduct a trial operation of agricultural
insurance in a designated area and period. Based on
the results of the trial operations, it may be adopted
as a fully promoted item.
The means, qualifications of the insured, scope,
payment method and its effect, insurance amount,
insurance type content of the payment items, review
basis and other related matters of the trial
operations of the agricultural insurance specified
in the preceding paragraph shall be prescribed by the
competent authority.
Article 6
Based on the characteristic of the subject matter
insured and the policy objective, an insurance
enterprise or a farmers’ or fishermen’s association
approved by the competent authority shall act as the
insurer for agricultural insurance and conduct the
agricultural insurance business.
The insurer specified in the preceding paragraph may
entrust a farmers’ or fishermen’s association to
handle the operations of the agricultural insurance.
The qualifications and requirements, procedure to
apply for approval and rescission of approval for a
farmers’or fishermen’s association to serve as the
insurer specified in the first paragraph, the scope
of entrustment of the handling of the operations of
agricultural insurance prescribed in the preceding
paragraph and other matters to be complied with shall
be prescribed by the competent authority.
Article 7
Where a farmers’ or fishermen’s association serves
as the insurer, it shall only handle agricultural
insurance that meets the demand of the industry policy
set down by the competent authority and shall enter
into an insurance contract based on the agricultural
insurance contract sample prescribed by the competent
authority. The proposer, the insured, the subject
matter insured, the insured incident, premium rate,
reserve funds, re-insurance and other matters to be
complied with shall be prescribed by the competent
authority.
Where an insurance enterprise handles agricultural
insurance,the insurance products shall be reported
to the Financial Supervisory Commission by the
insurance enterprise or the Non-Life Insurance
Association of the Republic of China for review;
permission of the competent authority shall be
obtained before submission for review and the same
shall apply in the event of amendments.
Article 8
Based on the policy objective and the specific demands
of the industry policy of agriculture, forestry,
fishery and animal industry businesses, agricultural
insurance may be handled by means of mandatory
insurance in whole or in part or voluntary insurance.
Where the insured party for the mandatory insurance
fails to buy the insurance as required, the competent
authority may withhold or at its discretion reduce
the relevant measures related to the subject matter
insured, including grant, subsidy, incentive reward,
aid and relief.
With respect to the mandatory insurance specified in
the preceding paragraph, the subject matter insured,
scope, insured party, the measures that may be taken
against an insured party for the mandatory insurance
who fails to buy the insurance as required and other
matters to be complied with shall be prescribed by
the competent authority.
Chapter 3 Premium and Subsidy
Article 9
The premium of agricultural insurance shall be paid
before the contract takes effect. However, this shall
not apply where the competent authority otherwise
designates the payment method.
Article 10
The competent authority may provide a subsidy to the
proposer’s premium for the agricultural insurance.
The rate of subsidy shall be determined according to
the subject matter insured and the type of insurance.
During the five years after the enforcement of this
Act, the upper limit shall be fixed at 75%; from the
sixth year of the enforcement, the upper limit shall
be 60%. However, the foregoing shall not apply to
mandatory insurance.
The competent authority may adjust the amount of cash
relief provided for in the Agricultural Natural
Disasters Relief Regulations based on the subject
matter insured, insurance type and the recipient and
rate of premium subsidization.
The recipient, rate, amount, application procedure,
issuance, rescission of subsidization and other
matters to be complied
with for the premium subsidization specified in
Paragraph 1 shall be prescribed by the competent
authority.
Article 11
The competent authority shall assist the insurer in
the development of agricultural insurance products.
The competent authority may provide subsidization to
the surcharge incurred by the insurer in the handling
of agricultural insurance or provide incentive rewards.
The recipients, qualifications, review procedures and
basis, subsidization and rescission of subsidization
or incentive rewards and other matters to be complied
with for the subsidy or incentive rewards specified
in the preceding paragraph shall be prescribed by the
competent authority.
Chapter 4 Agricultural Insurance Fund and Risk
Spreading and Management
Article 12
The insurer shall underwrite the risk of agricultural
insurance by means of the risk spreading and
management mechanism established by the competent
authority.
The risk spreading and management mechanism specified
in the preceding paragraph shall be administered by
the Agricultural Insurance Fund established by the
competent authority; the risk transferred by the
insurer shall be assumed by the foregoing fund, ceded
to domestic or foreign reinsurers or handled in the
manner prescribed by the competent authority.
With respect to the risk spreading and management
mechanism specified in the preceding two paragraphs,
the competent authority shall, in
consultation with the Financial Supervisory
Commission, prescribe regulations governing the risk
assumption limit or rate, insured amount, insurance
premium rate, provisions for various reserve funds
and other matters to be complied with.
Article 13
The Agricultural Insurance Fund shall conduct the
following activities:
1.Matters on re-insurance, risk assumption and risk
spreading of agricultural insurance
2.Matters on fund income and fund utilization
3.Establishment and maintenance of the agricultural
insurance information system
4.Education and training of loss adjustment personnel
and establishment and management of human resource
database; they may handle loss adjustment matters
upon appointment by the insurer
5.Education and publicity of agricultural insurance
6.Establishment of channels for assistance,
consultation and complaint for the proposer and the
insured of the agricultural insurance 7.Promotion
of other matters related to agricultural insurance
With respect to the Agricultural Insurance Fund, the
charter of endowment, fund utilization and other
matters to be complied with shall be prescribed by
the competent authority.
Article 14
The sources of funds for the Agricultural Insurance
Fund shall be as follows:
1.Endowment by the government
2.Reinsurance premium income received from
agricultural insurance products
3.Interest and returns on capital
4.Income from donations
5.Obtaining loans or financing from financial
institutions
6.Other sources of income
With respect to the endowment by the government
specified in Sub-paragraph 1 of the preceding
paragraph, the competent authority shall allocate
budgets up to NT$10,000,000,000; thereafter, it
shall continue to allocate and budget for the
foregoing fund based on the required underwriting
capacity and the extent of loss.
Chapter 5 Tax Reduction and Exemption
Article 15
Upon the issuance of a certificate by the Agricultural
Insurance Fund, the donations specified in
Sub-paragraph 4 of Paragraph 1 of the preceding
article may be catalogued as itemized deduction or
expenses in the tax return for that year in accordance
with Article 17 or Article 36 of the Income Tax Act.
Article 16
An insurer may be exempted from business tax and stamp
tax for handling agricultural insurance in accordance
with this Act.
All accounts, receipts, revenue and expenditures of
the Agricultural Insurance Fund for the handling of
agricultural insurance in accordance with this Act
shall be exempted from taxation.
Tax preference specified in the two preceding
paragraphs shall be limited to fifteen years.
Before the period expires, the Executive Yuan may
extend the tax preference period once for a maximum
period of fifteen years taking the actual
circumstances into consideration.
Chapter 6 Business Management and Dispute
Handling
Article 17
Where a farmers’ or fishermen’s association handles
the agricultural insurance business, it shall
establish a dedicated account and use the funds for
their specified purposes; it shall establish a
mechanism for the management and application of the
dedicated account, underwriting and claims adjustment
and internal audit and control. The requirements for
the source and purposes of funds for the designated
account, the management and application of the
dedicated account, underwriting and claims adjustment,
internal audit and control and other matters to be
complied with shall be prescribed by the competent
authority.
Article 18
The competent authority may at any time send its
officials to inspect the business, financial
conditions and other related matters of the
agricultural insurance handled by a farmers’ or
fishermen’s association, or order the foregoing
inspected party to submit financial statements,
lists of properties or other related information
and reports based on truthful representation within
a specified time. The directors, supervisors,
general-director and related personnel may not evade,
obstruct, or refuse the inspection or provide false
or incomplete information and reports.
The competent authority may engage the Financial
Supervisory Commission to handle the preceding
inspection.
Where necessary, the competent authority may appoint
a professional or a technician to investigate the
matters on the information or reports required to be
inspected as prescribed under Paragraph 1 and to
submit a report to the competent authority based on
truthful representation; the costs shall be borne by
the farmers’or fishermen’s association.
The competent authority shall properly practice the
fiduciary duty for the information obtained through
the manner specified in Paragraph 1 to Paragraph 3;
it shall conduct a safety check on the operations
of information; the collection, processing and use
of information shall be subject to requirements
under the Personal Data Protection Act.
Article 19
An insurer shall establish independent accounting to
record the operational and financial conditions in
the handling of agricultural insurance business.
Article 20
Where the competent authority and the Agricultural
Insurance Fund requests information on matters such
as the underwriting, claims adjustment and disputed
cases from an insurer, the insurer shall not evade,
impede or refuse the inspection or provide false or
incomplete information and reports.
For the purpose of handling the agricultural
insurance business, the competent authority or the
Agricultural Insurance Fund may request information
such as climate, geological or hydrological data or
research materials from a relevant entity or authority.
Article 21
The personnel responsible for handling loss adjustment
for agricultural insurance business shall comply with
the qualifications prescribed by the competent
authority or participate in the training organized by
an entity as designated by the competent authority and
obtain a certificate of competency.
The Agricultural Insurance Fund shall publish on the
information network the list of loss adjustment
personnel who have obtained a certificate of
competency in accordance with the preceding paragraph.
The competent authority shall establish loss
adjustment principles for insured incidents; where
necessary, it shall assist in the handling of matters
related to loss assessment.
The qualification, training, award of certificate of
competency, establishment of human resource database
and other matters to be complied with for the loss
adjustment personnel specified in Paragraph 1 shall
be prescribed by the competent authority.
Article 22
With respect to civil disputes arising from
agricultural insurance products or services provided
by a farmers’ or fishermen’s association, mediation
proceedings may be instituted by an ombudsman body
established under the Financial Consumer Protection
Act; where a resolution is achieved, the ombudsman
body shall prepare a mediation statement.
The processing, procedures, duration, resolution,
liability for mediation costs and other matters to
be complied with for the mediation specified in the
preceding paragraph shall be prescribed by the
competent authority in consultation with the
Financial Supervisory Commission.
Consultation with the competent authority may be
requested where professional matters on agriculture
are involved in the mediation proceedings of
agricultural insurance.
Article 23
Where a farmers’ or fishermen’s association violates
laws or regulations or is suspected of improper
management in the handling of agricultural insurance
business, the competent authority may issue an
official reprimand or order it to take corrective
action within a specified time and may take the
following disciplinary measures taking the gravity of
circumstances into consideration:
1.Revoke the resolution of a statutory meeting
2.Order to discharge the general-director or staff
from the performance of duty
3.Discharge the directors or supervisors or suspend
them from the performance of duty for a specified
time
4.Suspend the agricultural insurance business in
part or in full
5.Other measures related to business or operations
as necessary
The competent authority may engage other bodies to
assist the farmers’ or fishermen’s association
in handling the agricultural insurance business.
Chapter 7 Penal Provisions
Article 24
Where a farmers’ or fishermen’s association engages
in agricultural insurance business without the
approval from the competent authority in
contravention of Paragraph 1 of Article 6, it shall
be punishable by an administrative fine of not less
thanNT$300,000 and not more than NT$1,500,000.
Article 25
With respect to directors, supervisors,
general-director or related personnel of a farmers’
or fishermen’s association, when the competent
authority sends its officials or engages the Financial
Supervisory Commission for inspection in accordance
with Article 18 or orders it to submit financial
statements, lists of properties or other related
information and reports based on truthful
representation within specified time, where any of
the following circumstances arises, it shall be
punishable by an administrative fine of not less
than NT$150,000 and not more than NT$750,000:
1.Evade, impede or refuse inspection or
investigation or refuse to open the vault or other
storage facilities
2.Conceal or damage books and documents related to
business or financial conditions
3.Refuse to reply or misrepresent responses to
inquiries of inspection and investigation personnel
without justifiable reasons
4.Evade, impede, refuse provision of or fail to
provide on time financial statements, lists of
properties or other related information or reports
or provide false or incomplete information or
reports
Article 26
With respect to a farmers’ or fishermen’s
association, where any of the following circumstances
arises, it shall be punishable by an administrative
fine of not less than NT$60,000 and not more than
NT$300,000:
1.Failure to enter into an insurance contract based
on the agricultural insurance contract sample
prescribed by the competent authority in
contravention of the forepart of Paragraph 1 of
Article 7
2.Failure to comply with requirements of the latter
part of Paragraph 1 of Article 7 for the proposer,
the insured, the subject matter insured, the
insured incident, premium rate, reserve funds or
re-insurance
3.Failure to establish a dedicated account or to
use the funds for their specified purposes;
failure to establish mechanism for the management
and application of the dedicated account, claims
adjustment and internal audit and control or fails
to implement in substance each of the mechanisms
as required under Article 17 in the handling of
agricultural insurance business
Article 27
With respect to an insurer where any of the following
circumstances arises, it shall be punishable by an
administrative fine of not less than NT$60,000 and
not more than NT$300,000:
1.Failure to establish independent accounting to
record the operational and financial conditions as
required under Article 19
2.Evade, impede, refuse provision of or fail to
provide information or provide false or incomplete
information in contravention of Paragraph 1 of
Article 20
Article 28
The competent authority shall notify the Financial
Supervisory Commission where it imposes the penalty
specified in the preceding article on an insurance
enterprise.
Chapter 8 Supplementary Provisions
Article 29
A farmers’ or fishermen’s association that handles
agricultural insurance in accordance with Paragraph 2
of Article 58 of the Agricultural Development Act
prior to the enforcement of this Act shall be the
insurer from the enforcement date of this Act and
shall be governed by this Act in the handling of
agricultural insurance. However, the farmers’
or fishermen’s association shall obtain approval
from the competent authority within two years from
the enforcement date of this Act in accordance with
the method prescribed under Paragraph 3 of Article 6;
failure to obtain the approval within the specified
time shall result in the termination of status as an
insurer and the competent authority may order the
transfer of business within a specified time.
With respect to a farmers’ or fishermen’s
association that handles agricultural insurance in
accordance with Paragraph 2 of Article 58 of the
Agricultural Development Act, the balance of its
dedicated agricultural insurance account accrued
before the establishment of the Agricultural
Insurance Fund shall be transferred into the Fund
within two years of the establishment of the
foundation.
Article 30
The enforcement date of this Act shall be determined
by the Executive Yuan.
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