The Compulsory Automobile Liability Insurance (CALI) is one of the important systems established to compensate the basic loss of the victims in traffic accidents. Many countries in the world require automobile owners, or drivers, to have automobile liability insurance, which ensures the victims could receive basic coverage for the injuries caused by traffic accidents and maintains traffic safety.

Therefore, after consulting the legislative systems of many other countries and hearing the voices of local activists, the legislative procedures of the Compulsory Automobile Liability Insurance Act (the "CALI Act") were finally completed in December 1996. The CALI Act became effective on January 1, 1998.