After Xintai Insurance and China Three Gorges Life announced the suspension of Internet insurance business on December 2, Fubon Property & Casualty Insurance also issued an article through the official WeChat public account on December 6, saying that starting from January 1, 2022 Internet insurance business is suspended.
Based on this, three insurance companies have suspended Internet insurance business in December alone. Previously, many insurance companies, including Hongkang Life Insurance, Hetai Life Insurance, Hengqin Life Insurance and Dingcheng Life Insurance, have successively announced that they will remove a number of Internet insurance products from the shelves.
In this regard, some industry analysts believe that as the transition period of the new regulations ends at the end of the month, more insurance companies will gradually suspend Internet insurance business.
On December 6, Fubon Property & Casualty Insurance posted on its official WeChat public account that the company would suspend its Internet insurance business from January 1, 2022, and the resumption time will be notified later. The protection rights of customers who have already been insured will not be affected.
On December 2, China Three Gorges Life Insurance issued the "Announcement on Suspension of the Company's Internet Insurance Business" stating that it will suspend the sale of various Internet insurance businesses on its self-operated online platforms starting from January 1, 2022. On the same day, Xintai Insurance also issued an announcement stating that in accordance with the company's overall arrangement for high-quality development strategic transformation, taking into account the time cycle of process optimization and technology research and development, and in accordance with the requirements of new regulatory regulations, the company will temporarily cease operations from January 1, 2022. Internet insurance business.
In fact, the fundamental reason why some insurance companies have suspended their Internet insurance business is the "Notice on Further Regulating Matters Related to the Internet Personal Insurance Business of Insurance Institutions" (hereinafter referred to as the "Notice") issued by the China Banking and Insurance Regulatory Commission on October 22. Clarify the entry threshold, operation and service requirements for the Internet personal insurance business, improve regulatory rules, refine product categories, reduce expense rates, and establish a lookback mechanism, requiring insurance companies to complete rectification of existing businesses before the end of the year.
In recent years, the development of Internet insurance business has entered a fast lane and has gradually become the main channel for insurance sales. According to data released by China Insurance Industry Association , the Internet personal insurance business achieved cumulative premiums of 211.08 billion yuan in 2020, a year-on-year increase of 13.6% from 2019, and channel business still dominates.
However, while developing rapidly, Internet insurance is full of chaos. Some Internet platforms are suspected of illegally engaging in insurance business. Some insurance institutions have prominent pricing risks of Internet insurance products, insufficient offline service capabilities, misleading sales, and many complaints and disputes. There are many problems such as inflated sales and technical service fees and illegal use of user information, which urgently need to be rectified and regulated. Based on this,
"Notification" was implemented. It is reported that the "Internet Insurance Business Supervision Measures" were revised and implemented on February 1 this year. As a supporting normative document, the "Notice" focuses on regulating risks and chaos in the field of Internet personal insurance.
According to the requirements of the "Notice", insurance companies (excluding Internet insurance companies) must meet at least four conditions to carry out Internet personal insurance business: the comprehensive solvency adequacy ratio reaches 120% for four consecutive quarters, and the core solvency is not less than 75%; the comprehensive risk rating for four consecutive quarters is Category B and above; the liability reserve coverage rate is higher than 100% for four consecutive quarters; the insurance company's corporate governance assessment is C-level (qualified) and above.
If an insurance company wants to sell ordinary life insurance (except term life insurance) with an insurance period of more than ten years and ordinary annuity insurance products with an insurance period of more than ten years through Internet channels, it must also meet "advanced requirements": The comprehensive solvency adequacy ratio exceeds 150% for four consecutive quarters, and the core solvency is not less than 100%; the comprehensive solvency surplus exceeds 3 billion yuan for four consecutive quarters; the comprehensive risk profile for four consecutive quarters (or six quarters within two years) The rating is Category A or above; no major administrative penalties were imposed for Internet insurance business operations in the previous year; the insurance company's corporate governance assessment is Grade B (good) and above.
In addition, through predetermined additional fees, it limits the disorderly expansion of some small and medium-sized companies that rely on fees.The notice stipulates that the scheduled surcharge rate for Internet personal insurance products with an insurance period of one year or less shall not be higher than 35%, and the scheduled surcharge rate for the first year of Internet personal insurance products with an insurance period of more than one year shall not be higher than 60%. The average surcharge rate Not higher than 25%.
For insurance companies that have already launched Internet personal insurance business, they should complete the rectification of their existing Internet personal insurance business before December 31, 2021. Entities and products that do not meet the relevant conditions of the "Notice" will not be allowed to use Internet channels from January 1, 2022. business.
Guosheng Securities believes that the Internet personal insurance business will be more standardized in the future, and leading insurance companies and intermediaries will benefit more. In addition, as regulations on Internet personal insurance business become more detailed, requirements include product scope, operating organizations, services, etc., especially specific requirements for continued solvency, governance assessment and solvency excess, etc., and Implementing a pricing lookback mechanism will help improve industry chaos. In addition, the restrictions on Internet long-term insurance expense rates have given them a comparative advantage in price, and large insurance intermediaries have advantages in business areas. Leading insurance companies and intermediaries are expected to benefit even more in the future.
Economic Observer Network Reporter Wang Qing
Editor/Fan Hongwei
