On October 13, 2021, Mr. Chen Yuyan, a senior partner of Shanghai Landi Law Firm, was interviewed by a reporter from the Financial Associated Press and interpreted the "Administrative Measures for Accident Insurance Business" recently issued by the Banking and Insurance Regulatory Commission from a professional perspective.
Recently, the China Banking and Insurance Regulatory Commission issued the "Measures for the Administration of Accident Insurance Business" (hereinafter referred to as the "Measures"), starting from improving the market-oriented formation mechanism of accident insurance rates, strengthening the strength of credit, guiding the reduction of the level of accident insurance commission fees, and clarifying the "negative list" of operation, etc., to promote insurance companies to change their business models and increase the correction of market chaos such as compulsory tying and bundling.
Before the promulgation of the Measures, accident insurance products frequently had the phenomenon of "high fees and low compensation", especially in products such as aviation insurance, channel fees can even account for more than 50% of the total premiums collected (in extreme cases, even up to 95%), and the actual proportion of premiums used for compensation is extremely low. To this end, the Measures clearly stipulate the upper limit of the predetermined surcharge rate, so that the actual risk protection obtained by consumers is commensurate with the level of premiums they spend.
Lawyer Chen believes that the Measures mainly raise the operational threshold of accident insurance business and prevent the insurance department from implementing disorderly competition through high channel fees. Overall, the Measures require the reduction of additional costs for accident insurance products, and increase the requirements of insurance companies in information disclosure and sales management, and some insurance companies that fight price wars regardless of cost will face great compliance pressure.
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Randy Rong Legal Protection Team
Finance and insurance business is one of Randy's core business areas, aiming to provide high-quality and professional legal services to Chinese and foreign insurance companies, insurance intermediaries (including insurance professional agencies, insurance brokerage agencies, insurance valuation agencies, insurance concurrently operating agencies) and insurance consumers, covering insurance and reinsurance and other professional fields. At present, Randy's insurance legal service team is composed of leading professional lawyers at home and abroad, all from well-known universities and law schools at home and abroad. The team is fluent in a variety of languages, including chinese and English and has extensive experience in legal services, including expert lawyers with complex disciplinary backgrounds, certified public accountants, external valuation consultants and other senior professionals. Most of the lawyers have engaged in practical work in property insurance companies and life insurance companies, and still serve as legal counsel for many insurance companies, and have published dozens of professional papers in influential journals and magazines at home and abroad.