The Legislative Yuan (“Legislature”) in April discussed COVID-19 insurance policy disputes, draft amendments to the Reclaimed Water Resources Development Act and the Tobacco Hazards Prevention Act, as well as a bill aimed at corporatizing the Taiwan Railways Administration apart from other issues and bills.
Amid surging daily cases, consumers have been rushing to purchase COVID-19 insurance policies; however, insurers in mid-April began modifying and even halting sales of these policies, giving rise to controversy. This drew the attention of several Finance Committee legislators who asked the Financial Supervisory Commission (FSC) for clarification. The FSC said that the terms of all active insurance policies will remain unchanged, but insurers may make reasonable adjustments according to their respective risk bearing capacity, rate adequacy and changes in the COVID-19 situation and/or the government’s infection prevention and control measures. Despite the FSC’s clarification, disputes related to COVID-19 insurance policies and claims will likely continue to flare up while the pandemic persists.
During an Economics Committee meeting, Minister of Economic Affairs Wang Mei-hua said that the executive branch’s draft amendment to the Reclaimed Water Resources Development Act is focused on bolstering requirements on developers to use reclaimed water for the sake of sustainability. The amendment on April 29 passed a third reading at the Legislature. Apart from lowering the threat of water scarcity, the amendment is expected to help accelerate growth in the wastewater treatment market and could also indirectly benefit Taiwan’s electricity supply.
Regarding the draft amendments to the Mental Health Act, New Power Party (NPP) Legislator Wang Wan-yu called for the establishment of community support networks to be written into law and Kuomintang (KMT) Legislator Chang Yu-mei proposed that the National Health Insurance should not bear the expense of mandatory treatment. The Health Committee decided to reserve these and other proposals for cross-caucus negotiations. In light of reservations voiced by consumers and academics in public hearings, the draft amendments to the Tobacco Hazards Act will continue to be on the Health Committee agenda in May. These will have significant implications for the tobacco industry.
The Transportation Committee reviewed a bill to corporatize the Taiwan Railways Administration. Although opposition legislators called for halting the bill’s review until the government reaches a consensus with the Taiwan Railway Labor Union, the Transportation Committee forged ahead with its preliminary review, leaving the more controversial portions to be decided by cross-caucus negotiations. In protest, the Taiwan Railway Labor Union said that its members have not ruled out further campaigns against overtime during upcoming public holidays. If left unresolved, significant disruptions to holiday travel and tourism are expected in the latter half of the year, in particular in Eastern Taiwan where high-speed rail coverage is lacking and the highway system is not as dense.
The following contains more details about the above-mentioned developments at the four standing committees that Soundline periodically tracks, namely the Finance Committee, the Economics Committee, the Transportation Committee, and the Social Welfare and Environmental Hygiene Committee (Health Committee).
COVID-19 insurance policy disputes
Amid surging daily cases, consumers have been rushing to purchase COVID-19 insurance policies; however, insurers in mid-April began modifying and even halting sales of these policies, leading to consumer disputes about insurers’ decision to pull products off the shelf and denying re-enrollment.
KMT Legislator Lee Guei-min during a Finance Committee meeting on April 18 raised concerns about some insurers’ decision to halt sales of COVID-19 policies. In response, the FSC said that there are still more than 50 policies that are available for purchase by the public.
During a Finance Committee meeting on April 28, KMT Legislators Tseng Ming-chung, Lai Shyh-bao, Democratic Progressive Party (DPP) Legislators Kao Chia-yu, Kuo Kuo-wen, and Taiwan People’s Party (TPP) Legislator Jang Chyi-lu also weighed in on the issue. Legislator Kao said that the COVID-19 insurance policies have become a tremendous burden on insurers while the FSC has not shown a clear stance on re-enrollment. Legislator Jang said that as the government has been adjusting its COVID-19 infection prevention and control measures according to caseload, insurers could take advantage of the situation by unilaterally interpreting the terms of these insurance policies to their advantage and either terminate the policies or make it difficult to re-enroll; therefore, the FSC should provide assistance to policyholders. During the meeting, Insurance Bureau Director General Shih Chiung-hwa said that the COVID-19 policies were designed with a one-year duration with no guarantee on re-enrollment, noting that following the spike in daily cases in April, insurers assessed that the products’ risk profile have changed significantly and therefore decided to pull unviable products from the market, leading to the recent rise in consumer disputes.
- Industry: general insurance
- Takeaway: The FSC in an April 21 news release said that the terms of all active insurance policies will remain unchanged; however, insurers may make reasonable adjustments according to their respective risk bearing capacity, rate adequacy and changes in the COVID-19 situation and the government’s infection prevention and control measures. Despite the FSC’s clarification, disputes related to COVID-19 insurance policies and claims will likely continue to flare up while the pandemic persists.
Amendment to the Reclaimed Water Resources Development Act
The Economics Committee on April 20 reviewed the draft amendments to the Reclaimed Water Resources Development Act, during which Minister of Economic Affairs Wang Mei-hua explained that the executive branch’s bill is focused on bolstering requirements on developers to use reclaimed water for the sake of sustainability.
NPP Legislators Chiu Hsien-chih, Chen Jiau-hua, independent Legislator Su Chen-ching, DPP Legislator Chiu Yi-ying, TPP Legislators Kao Hung-an and Tsai Pi-ju weighed in and asked about the build-out of water reclamation facilities and sewage systems, plans for desalination and establishing incentives for using reclaimed water. In response, the Ministry of Economic Affairs and its Water Resources Agency said that officials are tallying demand for reclaimed water and will continue to drive infrastructure build-out.
The amendment in question subsequently passed a third reading on April 29. Going forward, developers will be required to use a percentage of reclaimed water, no longer limited to those in regions where there is a likelihood of water shortage.
- Industry: primarily manufacturing, engineering and construction, water supply and wastewater treatment
- Takeaway: The amended Reclaimed Water Resources Development Act will no doubt be a boon to water sustainability. Apart from lowering the threat of water scarcity, it could also indirectly benefit Taiwan’s electricity supply by better ensuring hydropower during droughts. As improving the water infrastructure, including reclamation plants and the sewage system, is critical, infrastructure build-out and wastewater treatment market growth will be accelerated in the bill’s wake. However, implications for specific industry sectors will not be clear until related regulations are established.
Mental health and tobacco amendments
Regarding the draft amendments to the Mental Health Act, civil society organizations (CSOs) on April 19 listed appeals including reducing the duration of emergency placements from the proposed 14 days to seven days, establishing community protocols for emergencies, and clearly defining the roles and responsibilities of different government agencies. During Health Committee meetings on April 20-21, NPP Legislator Wang Wan-yu proposed that the amendment should include terms for the establishment of community support networks for mental health and KMT Legislator Chang Yu-mei proposed that the National Health Insurance should not cover the expenses of mandatory treatment. The Health Committee decided to table these and other proposals for cross-caucus negotiations.
Separately, the executive branch’s draft amendment to the Tobacco Hazards Prevention Act seeks to raise the legal smoking age from 18 to 20, expand the list of places where smoking is prohibited, establish regulation of heated tobacco products, and ban sales of electronic and/or flavored cigarettes as well as the sale of tobacco products where the packaging contains less than 20 cigarettes or 15 grams of tobacco in net weight. In response, stakeholders including consumers and academics during a public hearing on April 14 raised concerns about whether the change will drive the underground sale of some tobacco products, as well as cause some electronic cigarette users to switch over to conventional cigarettes instead at a time when the harms of electronic cigarettes remain undetermined. The draft amendment will continue to be discussed in May.
- Industry: healthcare; homecare; tobacco importation, distribution, and retail
- Takeaway: The Health Committee on May 2 completed its preliminary review of the draft amendments to the Mental Health Act; however, committee members were unable to reach a consensus on the duration of emergency placement, funding for emergency treatment, and the establishment of community support networks, and the matter was deferred for cross-caucus negotiations. The expectation is that CSOs will continue to advocate for establishing community support networks. Regarding the draft amendments to the Tobacco Hazards Prevention Act, although the Health Committee held a public hearing to gather opinions, it has not begun its preliminary review. The bills have significant implications for the tobacco industry.
Corporatization of Taiwan Railways Administration
The Transportation Committee on April 21 reviewed the executive branch’s bill to corporatize the Taiwan Railways Administration. Although opposition KMT Legislators Hung Mong-kai, Fu Kun-chi, Chen Hsueh-sheng, Lu Ming-che, and NPP Legislator Chen Jiau-hua called for halting the review until the government has reached a consensus with the Taiwan Railway Labor Union, the Transportation Committee completed its preliminary review amid heated debate; however, the more controversial parts of the bill, including those that concern Taiwan Railway Administration’s assets and liabilities (Articles 9, 10, 20 and 22), employee benefits (Articles 13 and 18), and the timetable for corporatization (Article 23), have been deferred for cross-caucus negotiation.
- Industry: tourism, retail, foodservice
- Takeaway: Despite multiple public hearings, the government and the Taiwan Railway Labor Union have not been able to reach a consensus on the terms of corporatization, with regard to disposal of assets and liabilities, subsidies for operating losses, employee benefits and pension plans. In protest of the government’s plan to move ahead without consensus, the Taiwan Railway Labor Union said that its members have not ruled out further campaigns against overtime during public holidays including the Dragon Boat Festival, Lantern Festival and National Day holidays. If left unresolved, significant disruptions to holiday travel and tourism are expected in the latter half of the year, in particular in Eastern Taiwan where high-speed rail coverage is lacking and the highway system is not as dense.
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