1. History

   The system planned under the Compulsory Automobile Liability Insurance Act (the “CALI Act”) differs substantially from the original Compulsory Automobile Third Person Liability Insurance, especially in regards to Article 3 of the CALI Act, formulated in reference to the systems in the United States of America, Britain and Japan, this article stipulates the establishment of the Motor Vehicle Accident Compensation Fund (the “Compensation Fund”). The goal is to provide basic protection to the victim or the survivors who are unable to obtain claim payment based on the stipulations of the CALI Act, thus offsetting the insufficiency of the CALI. On February 5, 2005, the CALI Act was amended to expand the scope of the automobiles and parties to compensate; to increase the basic protection for victims or claimants; and to empower the Compensation Fund with capabilities to improve the CALI. As the result, the capabilities of the Compensation Fund and the compensation payment coverage have been further extended.

2. Organization

   The Board of Directors is the highest decision-making unit of the Compensation Fund. All nine directors of the Board are appointed by the Financial Supervisory Commission. The chairperson is elected by the directors to chair the Board as well as to represent the Compensation Fund. A president takes the order from the Chairperson and the decisions of the BOD as well as coordinates and manages all business of the Compensation Fund. Due to the nature of the business, two vice president positions are established to help president manage business affairs. Moreover, Claims Department, Legal Affairs Department and Administration Department are created to manage relevant matters. On May 31, 2004, the Ministry of Finance and the Ministry of Transportation and Communication jointly announced the amendment of Donation Article of the Compensation Fund, stipulating the adding of supervisors to the Compensation Fund. On June 21 of the same year, the Ministry of Finance granted a permission to establish an Auditing Team.

Compensation

When a traffic accident occurs, the claimant may claim for compensation from the Compensation Fund for one of the following reasons:

1. An accident vehicle cannot be traced. (For example, a hit-and-run accident)
2. An accident vehicle is an uninsured automobile.
3. An accident vehicle is an insured automobile that was used or managed without the consent of the insured. (For example, accident involving a stolen automobile)
4. All or some of the accident vehicles are ones for which establishment of a contract for the CALI is not required. (For example, accidents involving agricultural vehicle and assembled vehicle)

Types and Objects of Claims

1. Subrogation Claim Cases:

   Claims against the party liable for damages based on social justice and the ultimate obligation of party liable for the damages. After paying compensation, the Compensation Fund may have the claimant’s right of claim against the party liable for damages.

2. Other Objects of Claims：
   1. Claims against a claimant
      1. When a claimant has received damages from a party liable for damages, the Compensation Fund shall deduct the amount of such damages when making its own compensation payment. When a deductible amount is not deducted, the Compensation Fund may claim for return of compensation within the limit of the deductible amount.
      2. After paying the compensation, the Compensation Fund discovered that the victim is in one of situations listed as below:
         1. The injury or death suffered by the victim was not the result of a traffic accident.
         2. The injury or death suffered by the victim was the result of the victim's deliberate or criminal actions(such as drunk driving, etc.).
         3. The victim is the driver who was involved in a one-vehicle traffic accident.
         4. Other individual cases of compensation claims in which the Compensation Fund should not pay compensation.
   2. Claims against the insurers

      When, after payment of compensation by the Compensation Fund, it is found that the accident vehicle is an insured automobile under the CALI, the Compensation Fund may claim against its insurer for return of the compensation.