Financial Regulatory Administration: Support foreign institutions to invest in the property and casualty insurance market and promote policy measures for the development of new energy vehicle insurance

On the 6th, the General Office of the National Financial Regulatory Administration issued a notice on the "Action Plan for Strengthening Regulation, Preventing Risks, Promoting Reform, and Driving High-Quality Development of the Property Insurance Industry."

It proposed to promote hierarchical and classified regulation. Improve the rating and evaluation system for property insurance regulation, enhance the rules for applying evaluation results, and reflect the orientation of supporting the strong and limiting the weak.

Emphasize key hierarchical regulation, strengthen continuous supervision of significant property insurance companies, implement high-intensity regulation on companies with substantial risk hazards, and study the procedures for elevating regulation. Explore differentiated regulation based on business scope, and research and introduce differentiated regulatory measures in corporate governance, institution establishment, and business operations.

Research the housing insurance system and explore the promotion of new types of household property insurance. Strengthen the insurance supply for comprehensive transportation corridors, support multimodal transport "single document" insurance, encourage the development of road disaster insurance, and improve insurance protection in transportation and pipeline sectors. Enrich insurance in the new citizen and silver economy fields. Accelerate the development of various liability insurances for employers, the public, products, and professions to meet the protection needs of traditional and emerging fields, and support the enhancement of social governance effectiveness.

The plan proposes that in the next five years, the property insurance industry will maintain stable growth, gradually enhance risk prevention capabilities, breadth and depth of protection, and comprehensive strength, and initially form a property insurance market system with a reasonable structure, good governance, and orderly competition.

The following are the key points of the "Plan":

Research and introduce policy measures to promote the high-quality development of new energy vehicle insurance

The plan proposes to accelerate business transformation and upgrading. Enrich new energy vehicle insurance products, optimize the market-oriented pricing mechanism, research and introduce policy measures to promote the high-quality development of new energy vehicle insurance, and continuously deepen comprehensive reform of vehicle insurance. Guide the industry to increase technological investment, strengthen technological empowerment, and accelerate online and intelligent transformation. Solidify the data foundation of the property insurance industry, deepen data application, and build data assets.

Strengthen research and application of insurance in new fields and new tracks such as intelligent driving and low-altitude economy

Strengthen research and application of insurance in new fields and new tracks such as intelligent driving, low-altitude economy, and quantum technology. Improve and perfect the service processes and standards of property insurance. Strengthen consumer rights protection in property insurance companies, standardize marketing and information disclosure, enhance claims service quality, and improve consumer complaint handling mechanisms.

Support qualified foreign financial institutions to invest in China's property insurance market

Support qualified foreign financial institutions to invest in China's property insurance market, encourage qualified Chinese property insurance companies to optimize their overseas layout, and support the high-quality development of foreign-funded property insurance companies in China. Prudently expand reinsurance supply. Accelerate the construction of the Shanghai International Reinsurance Center. Expand communication and cooperation in the domestic and foreign reinsurance markets. Actively participate in the formulation of international rules and explore mutual recognition of regulatory rules. Explore interconnectivity of related property insurance businesses and support the development of Hong Kong as an international financial center.

Focus on rectifying prominent issues such as false underwriting, false claims, and false cancellations

Strictly rectify illegal and irregular behaviors. Strengthen supervision of related transactions and fund utilization, focusing on rectifying issues such as transferring benefits to shareholders and their related parties, and hiding risks through multilayered nested investments to evade regulation. Strengthen the supervision of data authenticity, reinforce non-life insurance business reserve management, and solidify the operational data foundation Improve the operating rules for key areas of property insurance business, strengthen underwriting and claims supervision, focus on rectifying prominent issues such as false underwriting, false claims, false cancellations, inflated expenses, inflated premiums, and violations of insurance consumers' legitimate rights and interests. Adhere to strict investigations and dual penalties for institutions and personnel, and promote the connection between administrative and criminal accountability. Strengthen the company's serious internal accountability for illegal and irregular issues.

Research the housing insurance system and explore the promotion of new types of household property insurance

Expand pilot programs for comprehensive cost insurance and income insurance, develop insurance products that meet the needs of new agricultural business entities, and promote the "expansion, increase, and improvement" of agricultural insurance, focusing on building a multi-level agricultural insurance system.

Research the housing insurance system and explore the promotion of new types of household property insurance. Strengthen the supply of insurance for comprehensive transportation corridors, support multimodal transport "single document" insurance, encourage the development of road disaster insurance, and improve insurance protection in transportation and pipeline sectors. Enrich insurance for new citizens and the silver economy. Accelerate the development of various types of employer, public, product, and occupational liability insurance to meet the protection needs of traditional and emerging fields, supporting the enhancement of social governance effectiveness.

The "Action Plan" is divided into six parts

The head of the relevant department of the National Financial Regulatory Administration stated in response to reporters' questions regarding the "Action Plan for Strengthening Regulation, Preventing Risks, Promoting Reform, and Driving High-Quality Development of the Property Insurance Industry" that the "Action Plan" is divided into six parts:

The first part mainly elaborates on the overall requirements and development goals for strengthening regulation, preventing risks, promoting reform, and driving high-quality development of the property insurance industry.

The second to sixth parts propose twenty specific measures, mainly including the following aspects:

First, comprehensive and strict regulation. Enhance the quality and effectiveness of property insurance regulation from the aspects of strengthening market access and exit supervision, promoting hierarchical and classified regulation, strictly rectifying illegal and irregular behaviors, and improving prudent regulatory systems and rules.

Second, effectively prevent and resolve risks. Enhance capital replenishment capabilities, improve monitoring and early warning systems, perfect risk prevention and resolution mechanisms, and enrich risk resolution methods to enhance the risk prevention and resolution capabilities of the property insurance industry.

Third, deepen reform and promote openness. Guide property insurance institutions to clarify their development positioning, accelerate business transformation and upgrading, enhance risk management capabilities, and promote high-level openness.

Fourth, improve the quality and effectiveness of services to the real economy. Promote the property insurance industry to serve the development of new productive forces, facilitate urban-rural integration, safeguard major national strategies, and support the construction of disaster prevention, reduction, and relief systems.

Fifth, create a favorable development environment. Increase policy support, strengthen financial culture construction, gather synergy for high-quality development, and enhance the awareness of property insurance protection across society.

The following is the full text of the "Plan":

Action Plan for Strengthening Regulation, Preventing Risks, Promoting Reform, and Driving High-Quality Development of the Property Insurance Industry

In order to implement the spirit of the "Decision of the Central Committee of the Communist Party of China on Further Deepening Reform and Promoting Chinese-style Modernization," the Central Financial Work Conference, and the "Several Opinions of the State Council on Strengthening Regulation, Preventing Risks, and Promoting High-Quality Development of the Insurance Industry," this plan is formulated for strengthening regulation, preventing risks, promoting reform, and driving high-quality development of the property insurance industry (hereinafter referred to as the property insurance industry)

I. Overall Requirements

Guided by Xi Jinping's Thought on Socialism with Chinese Characteristics for a New Era, thoroughly implement the spirit of the 20th National Congress of the Communist Party of China and the second and third plenary sessions of the 20th Central Committee, fulfill the requirements of the Central Financial Work Conference and relevant documents, comprehensively strengthen the regulation of property insurance, prevent and resolve risks, deepen reforms in the property insurance sector, promote high-quality development of the property insurance industry, and serve the construction of a financial strong country.

In the next five years, the property insurance industry will maintain steady growth, gradually enhance risk prevention capabilities, breadth and depth of protection, and overall strength, and initially form a property insurance market system with a reasonable structure, good governance, and orderly competition.

II. Comprehensive and Strict Regulation

(1) Strengthen market access and exit regulation. Enhance the penetration-style regulation of equity, use big data to strengthen substantive reviews of shareholder qualifications, sources of funds, and behaviors, and increase the reporting and removal of non-compliant shareholders. Strictly control the access of key personnel such as the chairman and general manager, implement strict evaluation and supervision systems for the performance of directors and senior executives, and strengthen constraints on performance behaviors. Improve the access and exit mechanisms for property insurance branch institutions and optimize the regional layout of property insurance institutions. Adhere to the essence of insurance protection, increase product regulation efforts, implement intelligent product reviews, and resolutely eliminate problematic products.

(2) Promote hierarchical and classified regulation. Improve the regulatory rating and evaluation system for property insurance, and refine the rules for applying the rating and evaluation results to reflect the orientation of supporting the strong and limiting the weak. Focus on key hierarchical regulation, strengthen continuous supervision of significant property insurance companies, implement high-intensity regulation on companies with significant risk hazards, and study the procedures for elevating regulatory levels. Explore differentiated regulation based on business scope, and research and introduce differentiated regulatory measures in areas such as corporate governance, institution establishment, and business operations.

(3) Strictly rectify illegal and non-compliant behaviors. Strengthen the regulation of related party transactions and fund utilization, focusing on issues such as transferring benefits to shareholders and their related parties, and concealing risks through multi-layered nested investments to evade regulation. Enhance the regulation of data authenticity, strengthen the management of non-life insurance reserves, and solidify the foundation of operational data. Improve the operational rules for key areas of property insurance, strengthen underwriting and claims supervision, and focus on rectifying prominent issues such as false underwriting, false claims, false cancellations, inflated expenses, fictitious premiums, and violations of the legitimate rights and interests of insurance consumers. Adhere to strict investigations and penalties, and impose dual penalties on institutions and personnel, promoting the connection between administrative and criminal accountability. Strengthen the company's serious internal accountability for illegal and non-compliant issues.

(4) Improve the prudent regulatory system and rules. Refine regulatory laws and systems for key areas and weak links in property insurance. Establish a statistical system and indicator system for the property insurance sector, and build a cross-departmental data sharing mechanism. Strengthen the implementation and effect evaluation of property insurance regulatory laws and systems.

III. Effectively Prevent and Resolve Risks

(5) Enhance capital replenishment capabilities. Continuously strengthen the "reporting and operation in one" regulation, promote cost reduction and efficiency improvement in the industry, and enhance the ability for endogenous capital accumulation. Study and optimize shareholder qualifications and shareholding ratio requirements to enhance the attractiveness of external capital replenishment. Support property insurance institutions in increasing capital and issuing capital replenishment tools to enhance risk resistance capabilities.

(6) Improve the monitoring and early warning system. Strengthen macroeconomic situation analysis and dynamically assess the operational trends of property insurance. Increase monitoring efforts, closely watch for signs of risk, and strengthen regulation of new business models and formats Research and establish risk early warning procedures for property insurance, strengthening risk warnings for governance deficiencies, continuous operating losses, asset-liability mismatches, and companies nearing insufficient solvency. Enhance risk hazard investigation, promote the establishment of risk monitoring archives, and ensure early identification, early warning, early exposure, and early disposal of risks.

(7) Improve the risk prevention and resolution mechanism. Establish a property insurance risk early correction mechanism with hard constraints, clarify the triggering conditions and specific measures for early correction of risky institutions, orderly dispose of existing risks, and resolutely curb incremental risks. Establish a responsibility mechanism for risk disposal that aligns rights and responsibilities, incentivizes and constrains, and solidifies the primary responsibility of property insurance institutions for risk disposal, implements the local party committee and government’s territorial responsibility for risk disposal, and strengthens the regulatory responsibility of central financial management departments. Standardize performance behaviors, strengthen performance supervision, and hold accountable those who neglect their duties in strong supervision and risk prevention work according to regulations, discipline, and law. Improve the cost-sharing mechanism for disposal, and legally promote shareholders of problematic institutions to absorb risk losses first.

(8) Enrich risk resolution and disposal methods. Urge problematic institutions to initiate and implement recovery and disposal plans when necessary. Encourage mergers and reorganizations of property insurance companies, support qualified institutions in "transferring risks," and use market-oriented and legal methods to clear risks. For property insurance institutions with high risks and no sustainable operating capacity, legally carry out market exits and study relevant supporting policies. Standardize the risk disposal process and conduct disposal work in an orderly manner according to the law. Strengthen the connection between administrative and judicial processes to better leverage judicial procedures in resolving disputes and accelerating risk clearance.

IV. Deepen Reform and Promote Opening Up

(9) Ensure proper institutional development positioning. Deepen the organic integration of party building and corporate governance, encouraging institutions to develop in a specialized, refined, and intensive manner. Support large property insurance companies in enhancing their strengths and leading in serving the real economy and maintaining market order. Strengthen the functional positioning of policy-based property insurance companies and implement national strategies. Encourage small and medium-sized property insurance companies to pursue differentiated development paths based on their resource endowments and operational advantages. Guide internet property insurance companies, mutual insurance organizations, and self-insurance companies to develop in a standardized manner. Implement actions to improve the quality of insurance intermediaries, leveraging their positive role and enhancing professional capabilities.

(10) Accelerate business transformation and upgrading. Enrich new energy vehicle insurance products, optimize market-oriented pricing mechanisms, research and introduce policies to promote high-quality development of new energy vehicle insurance, and continuously deepen comprehensive reforms in auto insurance. Guide the industry to increase technological investment, strengthen technological empowerment, and accelerate online and intelligent transformation. Solidify the data foundation of the property insurance industry, deepen data applications, and create data assets. Strengthen insurance research and application in new fields and new tracks such as intelligent driving, low-altitude economy, and quantum technology. Improve and perfect the service processes and standards of property insurance. Strengthen consumer rights protection in property insurance companies, standardize marketing and information disclosure, enhance claims service quality and efficiency, and improve consumer complaint handling mechanisms.

(11) Enhance risk management capabilities. Guide the property insurance industry to optimize pricing models, methods, and tools, strengthen product pricing management, and explore the establishment of protection mechanisms for innovation in property insurance product services. Prevent risks related to data, models, and algorithms, strengthen network and data security management, and ensure customer information protection. Urge property insurance companies to improve their asset-liability management systems to prevent asset-liability mismatch risks. Encourage property insurance companies to use technologies such as big data, artificial intelligence, the Internet of Things, and satellite remote sensing to carry out risk reduction services Support property insurance companies in establishing service platforms or risk laboratories, strengthen foundational research in safety technology, disaster prevention technology, and actively integrate into various industrial standard constructions to enhance competitiveness in the industrial chain. Strengthen the training of professional talent teams, expand the property insurance actuarial team, and cultivate a team of risk management engineers.

(12) Promote high-level opening up. Support qualified foreign financial institutions to invest in China's property insurance market, encourage qualified Chinese property insurance companies to optimize their overseas layout, and support the high-quality development of foreign-funded property insurance companies in China. Prudently expand reinsurance supply. Accelerate the construction of the Shanghai International Reinsurance Center. Expand communication and cooperation between domestic and foreign reinsurance markets. Actively participate in the formulation of international rules and explore mutual recognition of regulatory rules. Explore interconnectivity of related property insurance businesses and support the development of Hong Kong as an international financial center.

V. Enhance the Quality and Efficiency of Services to the Real Economy

(13) Serve the development of new productive forces. Promote the establishment of a technology insurance policy system and improve supporting measures. Optimize the insurance compensation policy mechanism for the first unit (batch). Encourage the role of co-insurance and other insurance mechanisms in key national support areas to enhance insurance protection capabilities. Enrich insurance supply in fields such as R&D, pilot testing, intellectual property, and cybersecurity. Optimize policies for the high-quality development of green insurance, explore the establishment of a green insurance innovation service system, and encourage the property insurance industry to operate in a green and low-carbon manner. Promote the application of remanufactured parts in the insurance field.

(14) Promote urban-rural integration development. Expand pilot projects for full-cost insurance and income insurance, develop insurance products that meet the needs of new agricultural business entities, and promote the "expansion, increase, and improvement" of agricultural insurance, focusing on building a multi-level agricultural insurance system. Research the housing insurance system and explore the promotion of new family property insurance. Strengthen the insurance supply for comprehensive transportation corridors, support multimodal transport "single document" insurance, encourage the development of road disaster insurance, and improve insurance protection in transportation and pipeline sectors. Enrich insurance for new citizens and the silver economy. Accelerate the development of various types of liability insurance for employers, the public, products, and professions to meet the protection needs of both traditional and emerging fields, supporting the enhancement of social governance effectiveness.

(15) Safeguard major national strategies. Proactively align with the risk protection needs of major strategies such as regional coordinated development and main functional areas, providing a package of risk management services. Accelerate the development of shipping insurance, improving underwriting capacity and service levels. Support relevant regions in conducting research and exploration of international road transport risk dispersion mechanisms. Encourage the industry to enhance domestic trade credit insurance underwriting capacity, helping to improve the integration level of domestic and foreign trade. Promote the optimization of underwriting and claims conditions, leverage the role of export credit insurance, and strengthen risk protection for "going out" enterprises. Encourage the "Belt and Road" reinsurance community to upgrade product services and enhance the special risk protection level for Chinese-funded overseas interests. Leverage the advantages of the property insurance industry in protecting project industrial risks, research and broaden funding channels, explore new models for insurance-investment linkage, and provide a package of risk management and financial services for major projects and key industries. Strengthen insurance protection for the private economy.

(16) Support the construction of disaster prevention, reduction, and relief systems. Promote the establishment of a multi-level catastrophe insurance protection mechanism covering the basic layer, expansion layer, and supplementary layer, and expand comprehensive catastrophe insurance pilot projects. Strengthen risk transfer mechanisms centered on reinsurance and risk securitization, and support qualified insurance institutions in Hong Kong to issue catastrophe bonds and other insurance-linked securities Research and improve risk models for major disasters such as typhoons, floods, and earthquakes. Explore quantitative standards for climate risk, actively develop climate insurance, and enhance the insurance protection level for natural disasters. Improve the insurance emergency service mechanism, strengthen the integrated service capability of disaster prevention and reduction before the event, emergency rescue during the event, and timely compensation after the event. Improve the service specifications for disaster accident claims, strengthen communication and cooperation with rescue, automobile repair, and other industries, and optimize accident investigation, post-disaster compensation, and pre-compensation work. Explore the linkage between police and insurance, promote rapid processing mechanisms such as "mutual collision quick compensation" for traffic accidents, and establish a mechanism for mutual recognition of vehicle loss surveys in major disasters.

VI. Create a Good Development Environment

(17) Increase policy support. Strengthen communication and coordination with relevant departments and local party committees and governments to seek policy support for property insurance businesses related to national economy and people's livelihood and major national strategies. Promote the rule of law in the property insurance sector and strengthen collaborative governance between the judiciary and regulatory bodies. Promote the improvement of civil compensation legal systems and tort liability legal systems, and support the introduction of mandatory insurance systems in key areas. Support the construction of national insurance innovation pilot zones and demonstration zones.

(18) Strengthen financial culture construction. Practice the financial culture with Chinese characteristics. Guide property insurance companies to establish correct views on operation, performance, and risk, and adhere to prudent and stable operations. Encourage the property insurance industry to enrich the carriers, forms, and content of cultural construction, and create distinctive and high-quality financial culture brands. Strengthen theoretical research in property insurance, enhance the linkage between government, industry, academia, and research, and promote innovative development in theoretical research.

(19) Gather momentum for high-quality development. Strengthen central-local collaboration and leverage the positive roles of departments, localities, and industries. Strengthen data governance, enhance data sharing with relevant departments, and integrate to establish a shared database to provide data support for the management of the property insurance industry and related public services. Utilize the roles of infrastructure such as the China Banking and Insurance Regulatory Commission, Shanghai Insurance Exchange, and industry organizations like insurance associations, actuarial associations, and insurance asset management associations to support property insurance regulation and reform development.

(20) Enhance the awareness of property insurance protection in society. Encourage the use of insurance mechanisms to share public governance tasks. Strengthen publicity and educational activities for property insurance, effectively interpret and promote property insurance policies, and cultivate public awareness of risk prevention and protection. Encourage the property insurance industry to strengthen effective interaction with insurance consumers and enhance the industry's image through quality service.

Source: China Banking and Insurance Regulatory Commission

The following is the full text of the Q&A with reporters:

The relevant department head of the China Banking and Insurance Regulatory Commission answered questions from reporters regarding

"Action Plan for Strengthening Regulation, Preventing Risks, Promoting Reform, and Driving High-Quality Development of the Property Insurance Industry"

The Financial Regulatory Bureau recently issued the "Action Plan for Strengthening Regulation, Preventing Risks, Promoting Reform, and Driving High-Quality Development of the Property Insurance Industry" (hereinafter referred to as the "Action Plan"), and the relevant department head answered reporters' questions on related issues

1. What is the background for the formulation of the "Action Plan"?

Answer: The introduction of the "Action Plan" is mainly based on the following four considerations:

First, to implement the deployment of the Central Committee of the Communist Party of China and the State Council regarding property insurance work. The Central Financial Work Conference requires comprehensive strengthening of supervision, prevention and resolution of risks, insurance must return to its original purpose of protection, focus on its main responsibilities and continuously enhance its protective capabilities. The Third Plenary Session of the 20th Central Committee proposed clear reform requirements for fields such as shipping insurance, technology insurance, and agricultural insurance. Recently, the State Council issued the "Several Opinions on Strengthening Supervision, Preventing Risks, and Promoting High-Quality Development of the Insurance Industry." The introduction of the "Action Plan" will help the property insurance industry better implement the requirements of the Central Committee and the State Council regarding property insurance work.

Second, to implement the work requirements for strong supervision and risk prevention in the property insurance sector. There are still varying degrees of illegal and irregular issues in some areas of property insurance, and some hidden contradictions and risks are gradually emerging, necessitating comprehensive strengthening of supervision to prevent and resolve risks.

Third, to further deepen industry reform and promote high-quality development. Currently, China's property insurance faces issues such as an incomplete market system, the need to improve development quality, and the need to enhance risk management capabilities. There is an urgent need to strengthen the top-level design of industry development and regulation to address the constraints on high-quality development of property insurance.

Fourth, to promote better service to the real economy and the people. The "Action Plan" focuses on improving the quality and efficiency of property insurance, providing comprehensive risk protection for the real economy, and better meeting the risk protection needs of the people in the new era.

2. Please introduce the main content of the "Action Plan"?

Answer: The "Action Plan" is divided into six parts. The first part mainly elaborates on the overall requirements and development goals for strong supervision, risk prevention, and promoting reform to drive high-quality development of the property insurance industry. Parts two to six propose twenty specific measures, mainly including the following aspects:

First, comprehensive and strict supervision. Improve the quality and effectiveness of property insurance supervision from aspects such as strengthening market access and exit supervision, promoting hierarchical and classified supervision, strictly rectifying illegal and irregular behaviors, and improving the prudent regulatory system and rules.

Second, effectively prevent and resolve risks. Enhance the capital replenishment capacity, improve the monitoring and early warning system, perfect the risk prevention and resolution mechanism, and enrich the methods for risk resolution and disposal to enhance the risk prevention and resolution capabilities of the property insurance industry.

Third, deepen reform and promote openness. Guide property insurance institutions to clarify their development positioning, accelerate business transformation and upgrading, enhance risk management capabilities, and promote high-level opening up.

Fourth, improve the quality and efficiency of services to the real economy. Promote the property insurance industry to serve the development of new productive forces, facilitate urban-rural integration, safeguard major national strategies, and support the construction of disaster prevention, reduction, and relief systems.

Fifth, create a favorable development environment. Increase policy support, strengthen financial culture construction, gather synergy for high-quality development, and enhance the awareness of property insurance protection in society.

3. What work arrangements are there after the issuance of the "Action Plan"?

Answer: Next, the Financial Regulatory Administration will focus on the following tasks:

First, urge all relevant units to implement the requirements of the "Action Plan," gradually enhancing the risk prevention capabilities, breadth and depth of protection, and overall strength of the property insurance industry.

Second, comprehensively strengthen property insurance regulation, maintain a good market order, effectively protect the legitimate rights and interests of insurance consumers, effectively prevent and resolve risks, and strive to build a property insurance market system with a reasonable structure, good governance, and orderly competition.

Third, continue to strengthen coordination with relevant parties, create a favorable policy environment, and promote the high-quality development of the property insurance industry.

Source: National Financial Regulatory Administration