Careful steps in the bancassurance market
May 04, 2011 | BY
clpstaff &clp articlesNew regulations from banking and insurance authorities aim to better monitor the burgeoning bancassurance market. Foreign insurance companies can expect a long-term and robust relationship with regulators if they cooperate, and are advised to develop suitable products for Chinese customers and lend their experience to the market
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Since 2007, with its direct and effective business model, bancassurance has become an important way to sell personal insurance products in the Chinese insurance market. It has played a large role in promoting the development of the insurance industry, especially that of personal insurance. As demonstrated by statistics, in 2010, Chinese insurance companies collected Rmb350.38 billion insurance premiums through bancassurance and this amount accounts for 33.7% of all life insurance premiums.
However, the fast development of bancassurance has been accompanied by a series of problems, such as misleading sales promotions and the payment of agency fees without proper accounting records, as is required by laws and regulations. Therefore, to mitigate these issues, in March 2011 the China Insurance Regulatory Commission (CIRC) and the China Banking Regulatory Commission (CBRC) jointly issued the Guidelines for Regulation of the Bancassurance Business of Commercial Banks
(商业银行代理保险业务监管指引) (the Guidelines) to regulate the bancassurance market.