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History of the Fund

Compulsory automobile liability insurance ("this insurance") is an important mechanism to ensure basic coverage for parties injured in an automobile traffic accident. Since 1957, our country has required all automobiles to be covered by liability insurance. However, such requirement was never independently legislated, leaving shortcomings within the system. In order to achieve the policy objectives of this insurance, and after consulting the legislative systems of other countries, the Executive Yuan drafted the Compulsory Automobile Liability Insurance Act (Draft) ("the Act") in 1992. The draft was submitted to the Legislative Yuan for deliberation, promulgated by the president on December 27, 1996, and came into effect on January 1, 1998.

The system planned under the Act differs substantially from the original Compulsory Automobile Third Person Liability Insurance, especially in regards to Article 3 of the Act. Formulated in reference to the systems in the United States, Britain and Japan, this article stipulates the establishment of the Motor Vehicle Accident Compensation Fund ("the Fund") to provide basic protection for parties injured in an automobile traffic accident when: the accident vehicles cannot be traced; the accident vehicles are uninsured automobiles; insured accident vehicles were used or managed without the consent of the insured; and/or all or some of the accident vehicles are exempt from this insurance.

December 1, 1997, the Ministry of Finance (MOF) and Ministry of Transportation and Communications (MOTC) jointly issued the Donation Article of the Fund. On January 13, 1998, the MOF approved establishment of the Fund; and on February 6, 1998, the Fund completed registration at the Registration Office of the Taiwan Taipei District Court. On July 1, 2004, the Financial Supervisory Commission (FSC) of the Executive Yuan was established, replacing the MOF as the competent authority of the Fund at that time.

In order to ensure the sustainable development and expansion of this insurance system to protect parties injured in automobile accidents, the competent authority, in March 2002, invited scholars and experts to form an ad hoc group to draft revisions to the Act. The draft revisions were submitted by the Executive Yuan to the Legislative Yuan for deliberation and subsequently promulgated by the president on February 5, 2005. Revisions to the Act in regard to the Fund included the deletion of the provision requiring that social security benefits be deducted from the compensation amount. The Act also expanded the scope within which a claimant could seek compensation to include, as reasons for claims, cases in which parties are injured or killed by a special-purpose car or agricultural machinery, thereby broadening the scope of protections to the public. Another key Act revision related to the Fund stipulates that, when a single automobile traffic accident involves multiple automobiles, and some of the accident vehicles are insured and some are automobiles set forth in Article 40, paragraph 1 of the Act, a claimant may claim for payment of insurance benefits or compensation jointly and severally by each insurer that is required to bear the obligation to pay benefits and by the Fund.


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Date : 2019/04/19
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