<h1 toutiao-origin="h3" > the Internet personal insurance regulatory rules landed, it is not easy to get a "ticket" for the 100 billion track! </h1>
The Internet life insurance track ushered in a rule update. Following the revision and implementation of the Measures for the Supervision of Internet Insurance Business at the beginning of the year, the China Banking and Insurance Regulatory Commission recently issued the Notice on Matters Related to Further Regulating the Internet Life Insurance Business of Insurance Institutions. As the implementation rules of the above measures, the regulatory framework for Internet life insurance business has been refined.
Sales threshold raised Small and medium-sized companies encountered obstacles
The regulatory authorities have clarified that the scope of Internet life insurance products includes accident insurance, health insurance (except nursing care insurance), term life insurance, ordinary life insurance with an insurance period of more than 10 years (except term life insurance) and ordinary annuity insurance with an insurance period of more than 10 years, as well as other life insurance products stipulated by the Banking and Insurance Regulatory Commission.
The Internet is already one of the important channels for life insurance sales. According to the data released by the China Insurance Industry Association, in 2020, a total of 61 life insurance companies carried out Internet insurance business, with a total cumulative scale of premiums of 211.08 billion yuan, an increase of 13.6% year-on-year.
However, at the same time of rapid development, the problems of illegal operation and improper innovation of some insurance institutions in the Internet life insurance market have become increasingly prominent, and complaints from Internet channels have surged. In the view of industry insiders, with the intensification of market competition, the Internet life insurance industry has problems such as vicious price competition, misleading sales, and high channel costs, and the rights and interests of consumers have been damaged.
In order to regulate the order of the life insurance market, the regulatory authorities have chosen to raise the entry threshold of Internet life insurance.
The Notice shows that insurance companies (excluding Internet insurance companies) should have a comprehensive solvency adequacy ratio of 120% and a core solvency of not less than 75% for four consecutive quarters to carry out Internet life insurance business; a comprehensive risk rating of Class B or above for four consecutive quarters; a liability reserve coverage ratio of more than 100% for four consecutive quarters; and a corporate governance assessment of insurance companies of C (qualified) and above.
But this is only the basic condition for entering the market. If an insurance company intends to carry out a "net red" insurance business, it must meet higher regulatory requirements. According to the Circular, insurance companies applying for approval or use of ordinary life insurance (except term life insurance) with an insurance period of more than 10 years and ordinary annuity insurance products with an insurance period of more than 10 years must also meet the comprehensive solvency adequacy ratio of more than 150% and the core solvency of not less than 100% for four consecutive quarters; the comprehensive solvency surplus of more than 3 billion yuan for four consecutive quarters; and the comprehensive risk rating of more than A for four consecutive quarters (or six quarters within two years). In the previous year, no major administrative penalties were imposed for the operation of Internet insurance business; the corporate governance assessment of insurance companies was B(good) or above.
Wang Xiangnan, deputy director of the Insurance and Economic Development Research Center of the Chinese Academy of Social Sciences, said in an interview with the Financial Times that for insurance companies involved in the Internet life insurance business, the basic requirements for access are not high, and insurance companies are relatively easy to meet. "However, it is necessary to have a comprehensive solvency surplus of more than 3 billion yuan for four consecutive quarters, and at the same time, it is also necessary to have a comprehensive risk rating of above Category A for 4 consecutive quarters (or 6 quarters within two years), which is a small company that intends to apply for approval or use ordinary life insurance (except term life insurance) and ordinary annuity insurance products for more than 10 years in the insurance period of the newly filed, and faces no small restrictions in obtaining business qualifications." Wang Xiangnan said.
In addition, the regulatory authorities also clearly require in the "Notice" that insurance companies carry out cost compensation medical insurance, disability income loss insurance, and medical accident insurance business through the Internet, in addition to meeting the above basic conditions, they must also set up provincial branches in the business area, or cooperate with other insurance companies and insurance intermediaries that have opened branches to ensure that offline service capabilities are available in the sales area.
This also means that the sales threshold of products such as millions of medical insurance compensation medical insurance and other products that were previously popular on the hot network has been raised. Among the top 10 insurance companies in the scale of Internet life insurance business in 2020, half of the insurance companies have less than 30 secondary branches, and some companies even have only single-digit branches. The new regulations will undoubtedly have a considerable impact on the Internet life insurance business of such small and medium-sized insurance companies.
Limit the upper limit of the expense rate to benefit consumers
The prominent problems reflected by consumers, such as improper innovation in Internet channels, misleading sales, vicious competition, and regulatory arbitrage, are also the focus of attention of the Notice.
The person in charge of the relevant department of the Banking and Insurance Regulatory Commission said that the Notice further strengthens the protection of Internet life insurance consumers. In terms of business entities, clear requirements are put forward for the technical capabilities, operational capabilities and service capabilities of insurance institutions, focusing on solving the service problems such as consumers who cannot find the surrender page, cannot find the complaint entrance, cannot find the insurance policy for delisted products, and buy fast and retreat slowly. In terms of product development, from the source, the misleading sales problems such as "0" yuan in the first month, long insurance and short do, as well as complaint concentration problems such as high deductions for surrender and obscure health notices have been standardized. In terms of improving supervision, increase the intensity of information disclosure, introduce social supervision, and focus on supervising the scientific pricing of Internet life insurance products.
The data shows that in 2020, the Internet life insurance business is still mainly based on cooperation with channels. In the whole year, the cumulative scale of premiums through channels was 178.7 billion yuan, an increase of 10.3% over 2019, accounting for 84.7%. Ning Wei, deputy dean of the School of Economics of Beijing Technology and Business University and secretary general of the Insurance Research Center, told the Financial Times: "At present, Internet insurance, whether from the insurer or the insured, has not reduced the cost of sales because of the Internet, but the cost is higher." Both parties to the contract need to pay more channel costs to Internet channel operators, which deviates from the original intention of Internet insurance. ”
The Notice proposes that the design of Internet life insurance products should reflect the characteristics of direct operation of Internet channels. The scheduled surcharge rate of Internet life insurance products with an insurance period of one year or less shall not be higher than 35%; the scheduled surcharge rate of Internet life insurance products with an insurance period of more than one year shall not be higher than 60%, and the average surcharge rate shall not be higher than 25%.
At the same time, the CBRC requires that Internet life insurance products must specify the upper limit of the intermediary fee rate in the actuarial report, and must not directly list the information technology support and information technology service expenses arising from the operation of the Internet life insurance business, and must not break through or covertly break through the upper limit of the predetermined additional fee rate.
"There are many main companies involved in the Internet life insurance business, and each company wants to use large Internet platforms to promote products, so that it is on the weak side, and in the face of higher fees charged by Internet platforms, the company also has to accept." By reducing the number of market operators, large insurance companies that are more likely to meet business qualification requirements have a greater say in the face of Internet platforms. From the perspective of nurturing the market, this helps insurance companies to reduce their expenses and benefit consumers. Ning Wei said.
It is worth noting that the new rules also implement pricing retrospective supervision for the first time. The Notice requires that insurance companies should regularly carry out internet life insurance business retrospectives as required, focusing on key indicators such as loss rate, incidence rate, expense rate, surrender rate, investment yield, etc., retrospective of deviations between actual operating conditions and actuarial assumptions, and take the initiative to take measures such as attention, adjustment and improvement, active reporting and information disclosure. The CBRC will initiate regulatory procedures such as questioning, investigation and inspection according to the retrospective situation of the Insurance Company's Internet life insurance business, and investigate and deal with violations of laws and regulations in accordance with the law.
"For those innovative product types, companies are allowed to appropriately launch products first, and then track and analyze and adjust in order to promote Internet life insurance innovation." However, in reality, there are phenomena such as companies cheating or inaction in the analysis of pricing retrospectives, so strengthening supervision can make the pricing retrospective mechanism really effective and maintain the market order of fair pricing, equal competition, active innovation and steady underwriting. Wang Xiangnan said.
Source: Financial Times
Reporter: Qian Linhao
Editors: Yang Zhiyuan, Li Liujia, Yu Jiaxin
Proofreader: Yu Jiaxin
Email: [email protected]