The Legislature’s Finance Committee in May continued to focus on consumer disputes stemming from COVID-19 insurance policies. In response to queries by several legislators, Financial Supervisory Commission (FSC) Chairperson Huang Tien-mu said that so long as insurance policies have come into force and their terms have been met, insurers are responsible for paying eligible claims and meet their contractual obligation regardless of whether consumers have purchased multiple policies. The Finance Committee on May 25 passed several relevant resolutions, including one requiring the FSC to get the Financial Ombudsman Institution (FOI) and insurance companies to tally the number of COVID-19 insurance disputes before the end of June, for the purpose of serving as a point of reference for regulatory review of insurance products going forward. The expectation is that the resolution of COVID-19 insurance disputes as well as its impact on the industry and other categories of insurance products will continue be a focal point for legislators.
Minister of Economic Affairs Wang Mei-hua on May 23 briefed the Economics Committee on her ministry’s program for subsidizing marketing campaigns in the foodservice industry (specifically up to half the campaign costs of approved applicants). Several legislators asked whether the program has sufficient funding, whether the program will benefit traditional eateries, whether the program will help drive business transformation, and whether the program will inadvertently prove to be a windfall for food delivery platforms. Since late May, in terms of funding, the Ministry of Economic Affairs has successfully secured an additional NT$3 billion from the Cabinet. Whether the pandemic will catalyze lasting transformation of the foodservices industry in Taiwan remains to be seen.
The Health Committee reviewed the draft amendments to the Tobacco Hazards Prevention Act. Only 11 out of the 47 articles of passed preliminary review, leaving the rest for cross-caucus negotiation at a later date, including those concerning the definition of tobacco products, advertising, marketing, the legality of flavored tobacco products, and penalties on smokers under the age of 20. Overall, the expectation is that tobacco regulation will be tightened going forward.
With COVID-19 cases continuing to rise, the Central Epidemic Command Center (CECC) decided to limit participants in domestic group tour packages to those that have been fully vaccinated and boosted, which in turn led to a wave of cancellations. The Transportation Committee voiced concerns about this vaccination requirement and whether current government support measures are sufficient for the hard-hit travel and tourism industry. Minister of Transportation and Communications Wang Kuo-tsai said that his ministry is focusing on stimulus (as opposed to relief) and that the Ministry of Transportation and Communications (MOTC) has secured the Cabinet’s approval to tap into the domestic travel voucher budget surplus for incentivizing the rollout of special group tour packages by travel agencies. Despite the government’s “new Taiwan model” (geared toward co-existing with COVID-19), consumers have been less inclined to leave their homes, which in turn has impacted the travel and tourism sector. If the outbreak does not subside in the near term and/or if the government does not lift its vaccination requirement on group tour packages, the effectiveness of the MOTC’s NT$5.5 billion package slated for launch in mid-July could be limited. In addition, as part of the package, subsidies for free independent travelers (FITs) staying at hotels differ from previous iterations in that they are limited to weekdays. This could also lead to less-than-hoped-for results.
The following contains more details about these 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
The Finance Committee continued to focus on consumer disputes stemming from COVID-19 insurance policies. During a meeting with the Finance Committee, FSC Chairperson Huang Tien-mu on May 23 said that the commission needs to strike a balance between consumer interests and the commercial viability of the insurance industry. Chairperson Huang said that policyholders who opted for the “3+4” quarantine rule are eligible for COVID-19 insurance claims and that insurers must honor all contractual commitments regardless of the number of policies purchased by consumers.
Including Kuomintang (KMT) Legislators Lin Te-fu and Lai Shyh-bao, Democratic Progressive Party (DPP) Legislators Kuo Kuo-wen and Lin Chu-yin, and Taiwan People’s Party (TPP) Legislators Jang Chyi-lu and Kao Hung-an, several asked the FSC about policyholders’ interests, difficulties with the insurance claims process, and insurance company finances, requesting the regulator to ensure that insurers meet their contractual obligations.
The Finance Committee on May 25 passed seven resolutions, including one proposed by Legislator Lin Chu-yin requesting the FSC, as financial regulator, to get the FOI and insurance companies to tally the number of consumer complaints about COVID-19 insurance policies before the end of June to serve as a point of reference for insurance product review going forward.
- Industry: General insurance
- Takeaway: Although the FSC has weighed in on COVID-19 insurance policy consumer disputes and issued press releases to state its position as financial regulator, lawmakers are evidently of the opinion that the FSC has not done enough to protect policyholders. Judging from the seven resolutions, settlement of disputes over COVID-19 insurance policy claims, impacts on the insurance industry, wider economic implications, and consumer interests in relation to other categories of insurance products will continue to be focal points for lawmakers.
-  經濟部5月26日新聞稿指出，行政院通過增列30億元經費，辦理經濟部餐飲行銷補助方案。
Foodservice marketing expense subsidy
During a meeting with the Economics Committee about extending aid and relief measures for the foodservices industry, Minister of Economic Affairs Wang Mei-hua on May 23 said that her ministry is providing subsidies that cover up to 50 percent (capped) of the cost of promotional campaigns by foodservice operators. As of May 20, the program had attracted more than 6,000 applicants, nearly exhausting the then remaining NT$600 million.
KMT Legislators Yeh Yu-lan, Yang Chiung-ying, Lee Guei-min and Hsieh Yi-fong, DPP Legislators Lin Tai-hua, Chen Ting-fei, Chiu Chih-wei, Chen Ming-wen and Su Chih-fen, and TPP Legislator Kao Hung-an weighed in on program, voicing concerns about whether the funding is sufficient, whether food vendors and traditional eateries stand to benefit, whether this will help drive business transformation, and whether the program will inadvertently prove to be a windfall for food delivery platforms. In her reply, Minister Wang conceded that NT$600 million is not enough and said that she will ask the Cabinet for more funding.
- Industry: Foodservice
- Takeaway: According to MOEA Department of Commerce data published May 23, foodservice revenues in April fell by 11.2 percent month-on-month and 5.8 percent year-on-year, indicating that the industry, relative to others, has been especially hard-hit. Given the aforementioned program’s streamlined application process and an additional NT$3 billion in funding secured by the MOEA from the Cabinet, more applicants are expected. However, it remains to be seen whether efforts at transforming the foodservice industry in face of pandemic challenges prove successful.
-  The MOEA on May 26 said that the Cabinet has increased the funding for the foodservice marketing aid program by NT$3 billion.
Amendment to the Tobacco Hazards Prevention Act
The Health Committee on May 18 and May 23 reviewed the draft amendments to the Tobacco Hazards Prevention Act. With the Cabinet’s bill not providing definitions of tobacco product components, some legislators called for applying requirements on tobacco products to the components thereof. Articles concerning the definition of tobacco products, advertising, marketing, and penalties were deferred for cross-caucus negotiation. In addition, as legislators were unable to come to a consensus on banning flavored tobacco and setting penalties on smokers under the age of 20, these articles were also deferred for cross-caucus negotiation. Of the bill’s 47 articles, only 11 passed preliminary review, leaving the remainder for negotiation at a later date. The Health Committee also passed a resolution asking the Ministry of Health and Welfare to complete a feasibility study on raising the tobacco surcharge.
- Industries: Tobacco manufacturing, import, distribution and retail
- Takeaway: While most of the articles in the draft amendment have been deferred for cross-caucus negotiation in the next legislative session, the expectation is that tobacco regulation overall will be tightened going forward.
Tourism stimulus package
The tourism industry has been hard-hit by the pandemic. The Central Epidemic Command Center on April 22 announced that people taking part in domestic group tours must be fully vaccinated and boosted, leading to a wave of cancellations. During a Transportation Committee meeting on May 9, DPP Legislators Liu Chao-hao, Hsu Chih-chieh, Chen Ou-po and TPP Legislator Chiu Chen-yuan asked about the MOTC’s aid for the travel and tourism industry in response to the pandemic and the aforementioned vaccination requirement. In response, Minister of Transportation and Communications Wang Kuo-tsai said that his ministry is focusing on driving stimulus (as opposed to providing relief) and that the MOTC has secured the Cabinet’s approval to tap into the domestic travel voucher budget surplus for incentivizing the rollout, by travel agencies, of special group tour packages that include Tourism Bureau-designated tourist attractions. Minister Wang on May 26 said that his ministry has secured another NT$5.5 billion from the Cabinet in stimulus funding, which will, however, not be appropriated for relief or for providing wage support.
- Industry: Travel and tourism
- Takeaway: Although the number of COVID-19 cases in 2022 has far surpassed the count in 2021, under the “new Taiwan model,” the government has not halted the operations of travel and tourism businesses; however, mobility has decreased among consumers out of their own volition, impacting the travel and tourism sector. The effectiveness of the MOTC’s NT$5.5 billion stimulus package, the distribution of which is set to begin in mid-July, could be limited if the vaccine mandate is not lifted. The accommodation subsidies for FITs are different from previous iterations in that they only apply to Mondays through Thursdays, which could also lead to less-than-hoped-for results.
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