Chinese regulators crack down on quick-return insurance products: mainland media

Chinese regulators have recently ordered life insurers to inspect quick-return insurance products sold through bancassurance channels, in a move to step up oversight of the sector, according to mainland media reports. 

These products typically feature insurance products with a cash value that exceeds premiums paid in a short period of time, as insurers deliberately lower actuarial fee assumptions to inflate cash values.

As policyholders can break even quickly, they tend to surrender their policies before maturity. Once a large volume of policyholders surrendering their policies simultaneously can create a liquidity crisis for insurance companies.

Meanwhile, the notice stated that insurers must not make new filings for products where the cash value at the end of the third policy year exceeds the premiums paid. Companies also must proactively suspend sales of existing legacy products with similar issues.
 

𝗗𝗼𝘄𝗻𝗹𝗼𝗮𝗱 𝗧𝗵𝗲 𝗦𝘁𝗮𝗻𝗱𝗮𝗿𝗱 𝗔𝗽𝗽 ↓