Jan 04, 2017 05:16 PM

China’s Insurance Regulator Cracks Down on Risqué Products

(Beijing) — China’s insurance regulator has banned several types of controversial policies that have been used by insurers to create hype, including those that covered losses from World Cup bets or from unplanned Valentine’s Day pregnancies.

Insurers are forbidden from selling several types of insurance products, including those that cover losses due to speculation or damages by rare events, according to a guideline issued by the China Insurance Regulatory Commission that came into effect on Sunday. Policies that attempt to “unfairly exploit” certain social issues such as severe air pollution or the rising rate of divorces in the country are also banned.

In recent years, Chinese property insurers have developed some eye-catching but misleading products to gain publicity, such as policies targeting married men that promise to offer compensation to their wives if the couple gets divorced due to an extramarital affair. Other controversial insurance products include those that hedge against losses due to an accidental pregnancy on Valentine’s Day or ailments caused by long periods of exposure to air pollution.

But conditions to claim compensation based on such insurance plans are quite strict. For example, purchasers of a smog-related policy cannot claim compensation unless the air is heavily polluted with an Air Quality Index reading of more than 300 for five consecutive days.

The rules also aim to curb questionable advertising practices in the industry. The use of ambiguous, vulgar and sensational words to promote insurance policies is strictly prohibited, according to the guideline, and clauses and charges on an insurance policy should be clearly specified.

The guideline also requires insurers to set up an in-house team to improve internal communication and decision-making processes when developing and managing insurance products.

Contact reporter Dong Tongjian (

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