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The Financial Supervisory Commission (“FSC”) Announces Results of 2021’s Assessment of the Implementation of Treating Customers Fairly Principles (“TCF Principles”) by Financial Institutions

In order to ensure that Taiwan’s financial institutions have properly implemented the TCF Principles, the FSC conducted off-site assessments of 35 banks, 30 full-licensed securities firms, 22 life insurers, and 19 non-life insurers on their performance of TCF Principles in 2020. The assessments have been completed, and firms scoring in the top 20% include 7 banks, 6 securities firms, 4 life insurers, and 4 non-life insurers. These top performers are listed as follows (presented in no particular order).
Banks: The Shanghai Commercial & Savings Bank, Ltd., Taiwan Cooperative Bank, DBS Bank (Taiwan) Ltd., Cathay United Bank, Hua Nan Commercial Bank, Ltd., HSBC Bank(Taiwan) Ltd., and Land Bank of Taiwan.
Full-licensed securities firms: Yuanta Securities Co., Ltd., CTBC Securities Co., Ltd., E.Sun Securities Co., Ltd., Taiwan Cooperative Securities, Mega Securities Co., Ltd., and First Securities Inc.
Life insurers: AIA International, Taiwan Branch, China Life Insurance, Prudential Life Insurance and Cathay Life Insurance.
Non-life insurers: CTBC Insurance, Taian Insurance, Cathay Century Insurance and AIG Asia Pacific Insurance Pte. Ltd., Taiwan Branch.
   Apart from recognizing the aforementioned top 20% firms, the FSC, for the first time, presents the Best Progress Awards to the firms which, as compared with the prior assessment result, have significantly improved their performance on TCF Principles.  The Best Progress Awards winners for this year are Union Bank of Taiwan, President Securities Corporation, Shin Kong Life Insurance and Nan Shan General Insurance.
The FSC said that the assessment has been conducted for the third consecutive year, and the financial industry as a whole has shown qualitative progress.  In addition to setting internal standards in accordance with the TCF Principles, financial institutions have regularly reviewed and updated standards, and have often proposed optimizations or reinforcement measures (such as inclusive financial measures) and more detailed regulations for better implementation (for example, firms opening up new businesses introduce relevant measures and actions for the protection of customer rights and interests).  The assessment process also found many bright spots in the emphasis and specific actions promoted by the financial institutions’ board of directors.  For example, the board of directors proposed TCF Principles-related specific measures to improve services, and provided financial-friendly service environments for the disadvantaged such as elders, disabled people, and those who live in remote areas.  Some firms established cross-unit task force especially for planning and implementing TCF Principles, trying to understand the positive practices of the same industry, so as to optimize services. 
    The FSC further stated that, in addition to financial institutions’ progress in implementing TCF Principles, it has found some faults during the assessment process.  FSC learnt that some banks’ financial consultants misappropriated customers’ funds, in violation of the principle of duty of care and loyalty.  Some full-licensed securities firms also need to strengthen their performance of the principle of duty of care and loyalty.  As for life insurers, some of insurers committed errors such as salespersons’ improper solicitation of insurance policies, misappropriation of premiums, and forged customers’ signatures.  Faults of some non-life insurers have also been noted.  For example, some non-life insurers have not treated disabled people fairly, and signatures of the insured persons were not being accurately confirmed during underwriting process in some cases.  Regarding the aforementioned cases that requires further corrections and improvements, FSC suggests that firms’ legal compliance and internal audit units enhance examinations of business units’ legal compliance practice and strengthen their internal control systems.  The FSC will also reinforce its daily supervisions.
The FSC promotes the TCF principles and has implemented the assessment mechanism since 2019. This is the third year of the assessment.  Since the assessment mechanism is still being reviewed, revised and adjusted yearly, it is maintained that top 20% of the firms as well as the Best Progress Awards winners be announced.  In order to encourage outstanding-performing firms, Banking Bureau, Securities and Futures Bureau, and Insurance Bureau will hold awards ceremonies respectively (depending on Covid-19 pandemic’s situation), and the award winners will share their practical experiences in implementing the TCF principles for other firms’ references.
The FSC stated that from the analysis of the assessment results for three consecutive years, the assessment process helps financial institutions to take the improved measures in the process of sales of financial products or services addressing the aspects of 9 TCF Principles that require improvements.  Some firms have paid more attention to enhancing satisfactory services, and some firms have introduced measures such as smart customer services to optimize consumers’ experiences of financial services. The assessment of implementation of TCF Principles also encourages financial institutions to self-examine the areas where internal control and internal audit should be strengthened to enhance the effectiveness of corporate governance.  The FSC will continue to supervise financial institutions’ legal compliance following the TCF principles and to strengthen the protection of consumers’ rights through reviewing and improving the TCF principles assessment mechanism, as well as amendments to financial laws and regulations.

Contact Unit: Mr. Wang (Section Chief), Department of Legal Affairs
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  • Update: 2021-07-15