Index-Linked Insurance for Public Sale by Year-End? FSC Says It's Still Undecided
The Financial Supervisory Commission (FSC) is considering approving index-linked insurance products like Indexed Universal Life (IUL) and Fixed Indexed Annuities (FIA), with the industry hoping for a launch by the end of the year. The FSC stated that while it has received proposals from the Life Insurance Association covering five key areas such as product design and sales qualifications, it is still under review. Related regulations and supporting measures are yet to be finalized, so there is no definite timeline. These policies feature principal protection, with returns linked to market indices, and their risk level falls between traditional interest-sensitive policies and investment-linked policies.
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- 📰 Published: May 19, 2026 at 22:35
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The Financial Supervisory Commission (FSC) is considering the opening of index-linked insurance products such as Indexed Universal Life (IUL) and Fixed Indexed Annuities (FIA), with the industry anticipating the potential launch of new products by the end of this year. The FSC stated that the Life Insurance Association has submitted proposals on five major aspects, including product design, qualifications for sales personnel, and information disclosure. Currently, the FSC is still reviewing the consolidated recommendations from the association, and related discussions have not yet been finalized.
By the end of 2025, the Life Insurance Association submitted proposals for index-linked insurance products to the FSC. These products have been sold overseas for many years, and several large life insurance companies are eagerly anticipating the opening of new products in Taiwan.
Chen Ching-yuan, Deputy Director-General of the FSC's Insurance Bureau, pointed out that the Life Insurance Association had been previously asked to provide comprehensive recommendations on foreign regulatory systems and market practices. The association recently re-consolidated its recommendations for the FSC based on meeting contents, mainly covering five major aspects: first, reviewing whether the current legal framework needs adjustment; second, points to note for product design; third, whether sales agents need to have experience selling investment-linked policies; fourth, information disclosure; and fifth, risk management and consumer rights.
Chen Ching-yuan indicated that the FSC is still reviewing the version proposed by the Life Insurance Association. New products will only be allowed for sale after relevant regulations are adjusted and supporting measures are in place. The industry suggests that the linked indices should comply with the relevant principles of the International Organization of Securities Commissions (IOSCO), ensuring the stability and transparency of the index.
It is understood that the related products must have a principal-protection feature. Currently, the association's proposed target audience includes the general public, with no other restrictions.
An official from the FSC's Insurance Bureau explained that for this type of index-linked policy, premiums are divided into two parts: one part is placed in a fixed account, and the other in an indexed account. The insurer uses derivatives such as hedging to achieve returns linked to the relevant index. As for the principal protection, it means the indexed account has a downside protection mechanism, with the minimum return being zero, not negative.
Regarding the target audience, the Insurance Bureau explained that these are relatively new products for the domestic market, so great importance is attached to policyholder rights and information disclosure. Relevant regulations are still being amended, and discussions are not yet final. Although the sale of IUL by Offshore Insurance Units (OIU) was permitted last year, it was mainly for overseas clients. This time, the industry is also suggesting opening up IUL for the domestic market, but this involves different regulations and still requires further study.
Life insurers explained that the rate of return for index-linked products is linked to market indices and is not guaranteed. The structure is based on purchasing fixed-income products, such as government bonds and high-yield bonds, and then using the interest from these products to buy derivatives (like options), which are linked to a market index to participate in market trends.
Regarding the nature of the policies, life insurers pointed out that FIA and IUL are still considered traditional policies, with a risk level somewhere between traditional interest-sensitive products and investment-linked policies. Currently, the relevant regulations still require public notice and adjustments, and adding the time for product review, it is expected that index-linked products may be launched by the end of the year.
Insurers noted that the products must have a principal-protection feature and be linked to an index from a major market under the International Organization of Securities Commissions (IOSCO). Sales personnel should also have more than three years of experience selling investment-linked policies. Considering factors like the liquidity and scale of options, the Taiwanese stock market is less likely to be a primary consideration for the linked asset. The industry is expected to start by linking to U.S. indices.
By the end of 2025, the Life Insurance Association submitted proposals for index-linked insurance products to the FSC. These products have been sold overseas for many years, and several large life insurance companies are eagerly anticipating the opening of new products in Taiwan.
Chen Ching-yuan, Deputy Director-General of the FSC's Insurance Bureau, pointed out that the Life Insurance Association had been previously asked to provide comprehensive recommendations on foreign regulatory systems and market practices. The association recently re-consolidated its recommendations for the FSC based on meeting contents, mainly covering five major aspects: first, reviewing whether the current legal framework needs adjustment; second, points to note for product design; third, whether sales agents need to have experience selling investment-linked policies; fourth, information disclosure; and fifth, risk management and consumer rights.
Chen Ching-yuan indicated that the FSC is still reviewing the version proposed by the Life Insurance Association. New products will only be allowed for sale after relevant regulations are adjusted and supporting measures are in place. The industry suggests that the linked indices should comply with the relevant principles of the International Organization of Securities Commissions (IOSCO), ensuring the stability and transparency of the index.
It is understood that the related products must have a principal-protection feature. Currently, the association's proposed target audience includes the general public, with no other restrictions.
An official from the FSC's Insurance Bureau explained that for this type of index-linked policy, premiums are divided into two parts: one part is placed in a fixed account, and the other in an indexed account. The insurer uses derivatives such as hedging to achieve returns linked to the relevant index. As for the principal protection, it means the indexed account has a downside protection mechanism, with the minimum return being zero, not negative.
Regarding the target audience, the Insurance Bureau explained that these are relatively new products for the domestic market, so great importance is attached to policyholder rights and information disclosure. Relevant regulations are still being amended, and discussions are not yet final. Although the sale of IUL by Offshore Insurance Units (OIU) was permitted last year, it was mainly for overseas clients. This time, the industry is also suggesting opening up IUL for the domestic market, but this involves different regulations and still requires further study.
Life insurers explained that the rate of return for index-linked products is linked to market indices and is not guaranteed. The structure is based on purchasing fixed-income products, such as government bonds and high-yield bonds, and then using the interest from these products to buy derivatives (like options), which are linked to a market index to participate in market trends.
Regarding the nature of the policies, life insurers pointed out that FIA and IUL are still considered traditional policies, with a risk level somewhere between traditional interest-sensitive products and investment-linked policies. Currently, the relevant regulations still require public notice and adjustments, and adding the time for product review, it is expected that index-linked products may be launched by the end of the year.
Insurers noted that the products must have a principal-protection feature and be linked to an index from a major market under the International Organization of Securities Commissions (IOSCO). Sales personnel should also have more than three years of experience selling investment-linked policies. Considering factors like the liquidity and scale of options, the Taiwanese stock market is less likely to be a primary consideration for the linked asset. The industry is expected to start by linking to U.S. indices.