Chinese Insurers Made Accountable for Sales Partners’Abuses
China’s insurance regulator ordered insurance companies to strengthen supervision of their intermediary partners such as agents and brokers in an effort to impose order on a chaotic and largely unregulated sector of the industry.
The China Banking and Insurance Regulatory Commission (CBIRC) in a notice Tuesday made clear that insurers will be held accountable for any wrongdoing by insurance intermediaries with which they have signed agency and collaboration agreements. Unbalanced regional development and vicious competition have led to a scattered and unregulated insurance intermediary sector that is rife with violations and shady practices, according to market participants.
At the end of September 2017, there were almost 2,600 insurance intermediaries doing business in China, including five large insurance brokering groups and more than 200 national insurance agencies. The rest are mostly regional and smaller local insurance intermediaries.
In 2018, the CBIRC fined 315 insurance intermediaries for violations, including providing false financial statements, failure to disclose information to clients as required and conducting insurance intermediary business without permits.
Financial data for the insurance industry also show that many intermediaries have not played the role expected of them. According to the 2017 China Insurance Yearbook, total premium income rose 27.5% in 2016 to reach 3.1 trillion yuan ($460 billion), the strongest growth the industry posted since 2008. But premium revenue generated by insurance intermediaries accounted for only 7.2% of the total, down 0.6 percentage point from the previous year.
One reason is that big insurance companies are building their own sales teams because they found that independent agencies don’t perform as well as their own teams, a person at a big insurance company told Caixin.
As of the end of 2017, China Life Insurance Co., the nation’s largest life insurer by market share, more than doubled its own sales team from 2013 to 1.58 million people. Another Chinese insurance giant, Ping An Insurance (Group) Co., had a sales team of 1.39 million in 2017, also more than double from 2013.
The regulatory commission’s notice bars insurers from directly or indirectly offering intermediaries or their employees benefits other than those stipulated in collaboration agreements.
Insurers are required to report on the business of their intermediary partners to the CBIRC on a regular basis. The regulator will conduct on-site inspections of insurance intermediaries.
Last June, the CBIRC initiated nationwide on-site inspections of insurance intermediaries. Specifically, the regulator is investigating illegal collection of funds, illegal sales of non-insurance financial products, and illegal operation of internet insurance business.Contact editor Yang Ge (email@example.com)
Apr 12 07:07 PM
Apr 12 04:40 PM
Apr 12 12:08 PM
Apr 09 05:51 PM
Apr 09 04:54 PM
Apr 09 02:08 PM
Apr 08 07:01 PM
Apr 08 07:00 PM
Apr 08 05:11 PM
Apr 08 01:30 PM
Apr 07 06:52 PM
Apr 07 02:03 PM
Apr 06 06:55 PM
Apr 06 05:03 PM
Apr 06 01:50 PM
- 1Call of Duty Mobile Developer Outplays Games Publisher as Timi Studio Earns More Than Activision Blizzard
- 2Huawei Deactivates AI and Cloud Business Group in Restructuring
- 3China Services Expansion Hits Three-Month High, Caixin PMI Shows
- 4Beijing Exhibitions: Everything You Need to See in April
- 5Finance Ministry to ‘Actively’ Push Property Tax Legislation
- 1Power To The People: Pintec Serves A Booming Consumer Class
- 2Largest hotel group in Europe accepts UnionPay
- 3UnionPay mobile QuickPass debuts in Hong Kong
- 4UnionPay International launches premium catering privilege U Dining Collection
- 5UnionPay International’s U Plan has covered over 1600 stores overseas