The new regulations on "integration of reporting and banking" for non-auto insurance business have been implemented and the "anti-corruption" of the property insurance industry has been strengthened

The State Administration of Financial Supervision recently issued the "Notice on Matters Related to Strengthening the Supervision of Non-Auto Insurance Business"(hereinafter referred to as the "Notice"), regulating the non-auto insurance business of property insurance companies from aspects such as optimizing the assessment mechanism, strengthening rate management, and strictly using terms and rates. It is required to reasonably set the predetermined surcharge and handling fee rate levels for non-auto insurance business, strictly implement the registered insurance clauses and insurance premiums, and promote rational competition, cost reduction and efficiency improvement, and quality expansion of non-auto insurance business.
Industry experts said that in response to the main problems and contradictions existing in the non-auto insurance field, the "Notice" comprehensively sorts out non-auto insurance regulatory policies for the first time, strengthens actuarial requirements and product reporting requirements for non-auto insurance business, guides rational competition in the industry, and will effectively promote The property insurance industry has shifted from pursuing scale and speed to pursuing quality and efficiency, thereby promoting the high-quality development of non-auto insurance business.
The so-called non-auto insurance business refers to other property insurance business other than motor vehicle insurance, including corporate property insurance, family property insurance, liability insurance, credit insurance, guarantee insurance, engineering insurance and other businesses. A reporter from Shanghai Securities News learned that the industry's non-auto insurance premium income in 2024 will be 777 billion yuan, with an average annual compound growth rate of more than 10% in the past five years, accounting for 46% of the premium income of the property insurance industry.
The "Notice" clarifies that property insurance companies should scientifically determine insurance premiums in accordance with the principles of fairness, rationality and sufficiency, reasonably set predetermined surcharge rates and handling fee rates, and shall not set high fees that are inconsistent with the services provided. Property insurance companies should establish a regular retrospective and dynamic adjustment mechanism for rates. If actuarial assumptions deviate too much from actual operating conditions, they should promptly adjust and re-file, and if necessary, they should stop selling relevant products first.
According to industry insiders, irrational competition has long existed in the non-auto insurance market, resulting in problems such as excessive fee levels, continued underwriting losses, and high premiums receivable. It not only adversely affects the cash flow and financial stability of insurance companies, but also easily causes claims disputes due to mismatch between payment obligations and insurance liabilities.
In response to these chaos, the "Notice" further strengthens strict terms and rates requirements. Property insurance companies and insurance intermediaries shall not materially change the liability of the registered insurance clauses through special agreements, approvals, agreements, memoranda, etc., and shall not adjust the insurance premium in disguise by illegally splitting the insurance subject matter, splitting the insurance amount, changing the attributes of the insured, or changing the nature of the subject matter, increasing or reducing the deductible (rate), etc.
At the same time, property insurance companies must pay out various operating and management expenses according to the principle of substance over form.Including: strengthening the accounting and control of handling fees, the intermediary fees paid for insurance sales shall not exceed the upper limit of the handling fee rate for product registration; it shall not be allowed to pay handling fees in disguised form through publicity fees, technical support fees, pre-payment prevention fees, etc.; it shall not be allowed to collect fees through false hanging of intermediary business, false listing of fees, etc., and break through the upper limit of the handling fee rate for registration in disguised form.
Industry insiders said that the industry summarizes this set of combined boxing requirements as "integration of reporting and operation" and "payment of orders at the expense of the fee". With the implementation of the "Notice", it is expected that it will effectively reduce the level of non-auto insurance business expenses and promote the improvement of the operating quality and efficiency of non-auto insurance business.
The "Notice" also requires property insurance companies to optimize the assessment mechanism. Property insurance companies should reasonably reduce the assessment requirements for premium scale, business growth, and market share, and effectively increase the assessment weights of compliance operations, quality and efficiency, and consumer rights protection.
Industry insiders said that the phenomenon of "involution" in non-auto insurance business has always been relatively obvious. In the past, various property insurance companies excessively pursued business scale and business growth, which not only sacrificed underwriting profits, but also triggered some risk events. The "Notice" requires property insurance companies to rationally plan non-auto insurance business based on market carrying capacity and their own development foundation, guide the industry to "anti-corruption", and transform towards pursuing business quality and business efficiency.
The reporter learned from relevant channels that the regulatory authorities will also adopt a series of supporting measures to promote the effective implementation of policies.Specifically, it includes: establishing three mechanisms of "investigation, notification and linkage"; clearing up existing products that have been registered in stages; guiding insurance associations to gradually promote the standardization of non-auto insurance products; and conducting intelligent inspection of products reported by property insurance companies.