On April 8, the China Banking and Insurance Regulatory Commission issued the “Notice of the General Office of the China Banking and Insurance Regulatory Commission on Deepening the Special Work on the Management of Disorders in the Personal Insurance Market”, focusing on the four major aspects of sales behavior, personnel management, data authenticity, and internal control. The typical problems and key risks existing in the insurance market shall be dealt with specifically.
(1) Sales behavior. Focus on the management of misleading consumers, alienating products, mismanagement, and other behaviors in the sales process. One is misleading sales. Whether there is a truthful or inaccurate introduction of product liability, function, and insurance period, promote and sell insurance products in the name of other financial products such as bank deposits or wealth management products; make a one-sided comparison of insurance products with deposits, treasury bonds, funds, trusts, etc. or exaggerate returns; Manufacture and disseminate false information through text messages, WeChat, Moments, etc.; through distortion of regulatory policies and hype products “restricted, time-limited, and limited.” The second is alienated products. Whether there is a disguised change of the insurance period, a disguised increase or decrease of the cash value of the product, or a disguised breakthrough of regulatory regulations through policy loans, partial receipts, reduction of the amount of insurance, etc.; dissimilation of insurance product functions, mismatches of different insurance product functions, and bundle sales. The third is mismanagement. Whether the insurance institution and its senior management have conducted illegal sales behaviors through command, decision-making, organization, and instructing others, and failed to take necessary measures to stop and correct illegal sales behaviors.
(2) Personnel management. Focus on the management of falsification, loose and disorderly behaviors by management personnel. The first is false information. Whether there are false academic qualifications and false identity information. The second is to inflate manpower. Is there any false increase in employees for the purpose of tax avoidance, maintenance of team structure, completion of incentive plans, and arbitrage of fees? The third is the failure of personnel. Whether there are any insurance premium rebates or other benefits that are given or promised to the policyholder, the insured, and the beneficiary that is not stipulated in the insurance contract and resell the policy. The fourth is loose management. Whether there is failure to strictly implement the assessment requirements, failure to go through the cancellation procedures for the resigned employees in a timely manner, and the illegal sales of non-insurance financial products by the employees.
(3) The authenticity of the data. Focus on governance through false underwriting, false expenses, falsely linked business, falsely linked people’s caps to withdraw funds, and covertly paying commissions off the books. One is false underwriting. Whether there is forcing practitioners to purchase insurance, buy and sell immediately, buy and borrow immediately, inflated insurance premiums, and arbitrage expenses through recurring insurance. The second is to falsely list expenses. Whether there is arbitrage of funds through false heads, false renewals, high recruitment, etc.; arbitrage of expenses through fictitious and inflated economic expenditures, such as false meeting fees, training fees, activity fees, incentive fees, etc.; company direct sales business Collect fees through intermediaries; pay off-book handling fees or other benefits to banking and postal agencies. The third is false premiums. Whether there is a virtual intermediary channel for insurance business. The fourth is false preservation. Whether there is fraudulent use of the policyholder’s name to apply for policy pledge loans, embezzle policy loan funds or handle surrender business, embezzle the cash value of the policy; practitioners embezzle or embezzle premiums or insurance funds Spark Global Limited.