Insurance regulator to step up crackdown

Source: Xinhua | 2019-03-04

China’s top banking and insurance regulator is intensifying its crackdown on risks and irregularities in the burgeoning intermediary insurance market, which contributed to a majority of the overall premium growth in 2018.

Underwriters are required to establish a strong management system with clear rights and responsibilities for their intermediary partners and strengthen supervision over the compliance of their cooperation businesses, a notice from the China Banking and Insurance Regulatory Commission said earlier this week.

To ensure the industry’s healthy development, the watchdog will focus on prominent violations of laws and regulations in the intermediary insurance sector in 2019, organize on-site inspections and enforce severe punishments on wrongdoers, a senior official from the Insurance Intermediary Supervision Department at the CBIRC told China Insurance News.

Banks function as an important channel for selling insurance plans and have played a vital role in the development of China’s insurance sector.

But this channel has long been plagued with rampant irregularities like misleading sales. Banking staff tend to induce customers to buy insurance policies by exaggerating their yields or confusing the difference between insurance products and bank deposits or other wealth management products.

To better cope with those irregularities, CBIRC aims to set up a comprehensive and unified regulation system covering market access threshold, personnel management and market behavior.

The regulator also plans to intensify scrutiny over online insurance platforms, which have seen robust growth during the past few years.

Data indicated that 155 domestic insurance firms and 445 insurance agencies are currently operating Internet insurance business, with about 15,000 products on sale.

The CBIRC has tightened its regulations over the sector since the start of this year and gas reportedly issued 136 penalty tickets — about half to insurance agencies.