Enforcement vs Protection: Taiwan’s 2025 Reform on the Executability of Insurance Policies

1. Background: Insurance Policies as Targets of Enforcement

In debt recovery proceedings, once a creditor obtains an enforceable title—such as a court judgment or arbitral award—the focus shifts to enforcement. At this stage, identifying executable assets becomes critical to the creditor’s ability to achieve recovery.

As a general principle, any asset of the debtor with monetary value may be subject to compulsory execution, unless it is expressly exempt under law or inherently non-assignable. This includes not only tangible assets (e.g., real property and movables), but also intangible rights, such as the cash surrender value of insurance policies.

However, insurance—particularly life insurance—serves a protective function for individuals and their families. As such, tension arises between a creditor’s right to enforcement and the policy objective of preserving essential financial protection.

2. The 2025 Reform: Narrowing the Scope of Execution

In response to this tension, and in line with prior Supreme Court views, Taiwan amended its Insurance Act in 2025 to clarify and restrict the scope of insurance policies subject to compulsory execution.

The key changes are as follows:

(a) Exemption for Health and Accident Insurance

The cash surrender value of health and accident insurance policies, where the debtor is the policyholder, is now expressly exempt from attachment and execution.

This reflects a policy decision to ensure that individuals retain access to essential health and accident protection, thereby safeguarding their basic economic stability.

(b) Threshold Requirement for Life Insurance

For life insurance policies, the cash surrender value of each policy must meet a minimum threshold before it may be subject to execution.

This prevents disproportionate enforcement against low-value policies that primarily serve protective, rather than investment, purposes.

(c) Introduction of the “Right of Intervention”

A significant development is the introduction of the “Right of Intervention,” which allows certain interested parties—such as beneficiaries or relatives—to preserve the policy.

Under this mechanism, such persons may, with the consent of the policyholder and the insured, pay an amount equivalent to the cash surrender value to the enforcement authority and be substituted as the new policyholder. This ensures the continuity of coverage despite enforcement proceedings.

3. Practical Implications

The 2025 reform reflects a clear legislative trend toward limiting the scope of enforcement against insurance-related assets.

For creditors, this means that:

• Not all insurance policies can be readily targeted for execution
• Additional legal and procedural considerations must be assessed before pursuing such assets

For debtors and policyholders, the reform enhances protection by:

• Preserving access to essential insurance coverage
• Providing mechanisms to prevent disruption of long-term financial protection

4. Conclusion

Taiwan’s recent reform represents a recalibration of the balance between enforcement efficiency and social protection. Going forward, both creditors and practitioners should carefully assess the nature of insurance policies before pursuing enforcement, as the scope of executable assets in this area has become significantly more limited.