30 March 2016
CIRC Orders to Halt Short-Term Insurance Products
The China Insurance Regulatory Commission (CIRC) has issued a circular to curb the sale of short- and medium-term insurance products with maturity duration of less than one year, effective 21 March 2016.
The revised regulatory rules require selling of insurance products with maturity duration of less than one year to stop forthwith and maturity period of between one and three years be gradually reduced to 90%, 70% and 50% of the overall quota each year over three years, and within 50% after three years. Sale of short- and medium-term products by insurance companies beyond the quota should be halted forthwith.
CIRC has also recently revealed complaint reports of 134 insurance companies of last year, with average score of property insurers in 2015 at 75.14, of which 38 companies scored lower than the average. The average score of life insurers was 76.77, of which 37 companies scored lower than the average. Based on complaint handling assessment rules, CIRC adopted eight assessment indicators: number of complaints for every 10,000 policies, number of complaints for every Rmb100million in premium, change in complaint rate for every Rmb100 million in premium, timely handling rate of cases referred by regulatory authorities, situation of receiving and responding to complaints, leapfrog complaint rate, negative media coverage, major mass incidents and leapfrog petitions.