The entry threshold for Internet property insurance business is clear. If certain conditions are met, auto insurance can be expanded to provinces, autonomous regions and municipalities where no branches are established.
2024-08-10
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On August 9, the State Financial Supervision and Administration issued the "Notice on Strengthening and Improving the Supervision of Internet Property Insurance Business" (hereinafter referred to as the "Notice"), aiming to further standardize Internet property insurance business, effectively prevent industry risks, and effectively protect the legitimate rights and interests of financial consumers. Promote the digital and intelligent transformation of the property and casualty insurance industry and achieve high-quality development of Internet property insurance.
The Notice clarifies the entry requirements for property insurance companies other than Internet insurance companies to carry out Internet property insurance business, namelyThe comprehensive solvency ratio is not less than 120% and the core solvency ratio is not less than 75% for the last four consecutive quarters; the comprehensive risk rating is B or above for the last four consecutive quarters; other conditions specified by the Financial Regulatory Administration。
Internet insurance companies that carry out Internet property insurance business must comply with the relevant conditions of the "Internet Insurance Business Supervision Measures", and their solvency and comprehensive risk ratings at the end of the previous quarter must meet the above indicators.
P&C insurance companies that do not meet the above operating conditions should immediately stop developing new Internet property insurance business. If they meet the requirements after rectification, they can resume developing new Internet property insurance business.
At the same time, the "Notice" also proposes that insurance intermediary institutions should meet the following conditions when conducting intermediary business related to Internet property insurance business: insurance professional intermediary institutions should be national institutions; have more than three years of experience in property insurance business operation; sales management, policy management, customer service and other information systems are complete, business process management meets business needs, and the institution itself complies with the relevant requirements for traceable management of Internet property insurance business; and other conditions stipulated by the State Administration of Financial Supervision.
The Notice requires that insurance institutions should adhere to the essential requirement of serving the real economy and the people when carrying out Internet property insurance business. It supports property insurance companies to develop small-amount, decentralized, convenient and inclusive property insurance products based on specific Internet scenarios, and improve the convenience and availability of insurance services.
It is worth noting that the Notice clearly states that:In principle, property insurance companies that meet the conditions of the "Notice" may expand the operating area of the Internet property insurance business to provinces (autonomous regions, municipalities directly under the central government, and cities with independent planning status) where no branches have been established, and promptly report the expansion of the Internet property insurance business to the dispatched agencies in the expansion areas.
In terms of auto insurance, the Notice emphasizes strict control over property insurance companies expanding their motor vehicle insurance business areas to provinces (autonomous regions, municipalities directly under the Central Government, and cities with independent planning status) where they have not established branches through the Internet. If they have strong risk management, internal control management, and comprehensive service capabilities, match the market environment, market capacity, commercial demand, degree of competition, etc. of the corresponding regions, and meet the regulatory requirements of the corresponding regions, they may be implemented after careful evaluation by the Financial Supervision Administration. In principle, property insurance companies operating agricultural insurance, ship insurance, special risk insurance, etc., are not allowed to expand their business areas through the Internet.
At the same time, property insurance companies are strictly prohibited from expanding their operating areas through the Internet to evade local supervision.
For property insurance companies to carry out Internet property insurance business, the "Notice" requires that a full-process service system including insurance contract modification, policy cancellation, claims settlement and complaint handling should be established; they should also strengthen business risk management in accordance with regulations, actively use scientific and technological means, establish and improve risk monitoring and early warning mechanisms, and build a comprehensive, dynamic and intelligent risk management system.
In terms of core risk control, property insurance companies should ensure independence and effectiveness, and should not completely entrust core business links that affect risk management to cooperative institutions, and should not rely solely on cooperative institution data for risk identification, assessment and control. At the same time, insurance intermediaries that cooperate with property insurance companies in Internet property insurance business should provide property insurance companies with core insurance business information such as customer information, risk control data and anti-money laundering data.
The Notice also clearly stated thatWhen property insurance companies carry out Internet property insurance business, they should strictly distinguish between online business and online and offline integrated business, establish and improve separation mechanisms, and effectively isolate and prevent operational risks.。
Property insurance companies can provide Internet property insurance business landing services to financial consumers through their branches and offline cooperative institutions. Offline cooperative institutions refer to other insurance institutions and their branches, including regional professional insurance intermediary institutions.
The Financial Regulatory Administration has granted a transitional period to property insurance companies that have already carried out Internet property insurance business. Property insurance companies should promote rectification on the basis of effectively protecting the legitimate rights and interests of financial consumers and fully comply with the requirements of the Notice before December 31, 2024.
Attached is the notice of the State Financial Supervision and Administration Bureau on strengthening and improving the supervision of Internet property insurance business
All financial regulatory agencies, property and casualty insurance companies, and insurance intermediaries:
In order to further standardize Internet property insurance business, effectively prevent industry risks, effectively protect the legitimate rights and interests of financial consumers, promote the digital and intelligent transformation of the property insurance industry, and achieve high-quality development of Internet property insurance, in accordance with the Insurance Law of the People's Republic of China, the Measures for the Supervision of Internet Insurance Business (Order No. 13 of 2020 of the China Banking and Insurance Regulatory Commission), the Measures for the Administration of Insurance Sales Behavior (Order No. 2 of 2023 of the State Financial Supervision and Administration Administration), and other laws and regulations, hereby notify you of the following matters regarding strengthening and improving the supervision of Internet property insurance business:
1. The insurance institutions referred to in this Notice include property insurance companies (including mutual insurance organizations and Internet insurance companies) and insurance intermediary institutions.
The insurance intermediary institutions referred to in this notice include professional insurance agencies, insurance brokers, insurance appraisers and commercial bank-type insurance agency agencies.
The Internet property insurance business referred to in this notice refers to the insurance business activities of property insurance companies selling property insurance products, concluding property insurance contracts, and providing property insurance services by establishing their own online platforms or entrusting insurance intermediaries to their own online platforms.
2. Property insurance companies other than Internet insurance companies shall meet the following conditions when conducting Internet property insurance business:
(1) The comprehensive solvency ratio for the most recent four consecutive quarters shall not be less than 120%, and the core solvency ratio shall not be less than 75%;
(2) The comprehensive risk rating has been Class B or above for the last four consecutive quarters;
(3) Other conditions prescribed by the Financial Regulatory Authority.
Internet insurance companies that carry out Internet property insurance business must comply with the relevant conditions of the "Internet Insurance Business Supervision Measures", and their solvency and comprehensive risk ratings at the end of the previous quarter must meet the indicators required by the preceding paragraph.
3. Insurance institutions should adhere to the essential requirement of serving the real economy and the people when carrying out Internet property insurance business. Support property insurance companies to develop small-amount, decentralized, convenient and inclusive property insurance products based on specific Internet scenarios, and improve the convenience and availability of insurance services.
4. In principle, property insurance companies that meet the conditions of this notice may expand the operating area of the Internet property insurance business to provinces (autonomous regions, municipalities directly under the central government, and cities with independent planning status) where they do not have established branches, and shall promptly report the expansion of the Internet property insurance business to the dispatched agencies in the expansion areas.
Short-term health insurance and accident insurance operated by property insurance companies through the Internet should comply with the relevant requirements of the "Notice of the Office of the China Banking and Insurance Regulatory Commission on Further Standardizing Insurance Institutions' Internet Personal Insurance Business" (Yinbaojianbanfa [2021] No. 108).
Strictly control property insurance companies from expanding their motor vehicle insurance business areas to provinces (autonomous regions, municipalities directly under the Central Government, and cities with independent planning status) through the Internet without setting up branches. Those with strong risk management, internal control management and comprehensive service capabilities, matching the corresponding regional market environment, market capacity, commercial demand, degree of competition, etc., and meeting the corresponding regional regulatory requirements may implement it after careful evaluation by the Financial Supervision Administration.
Property insurance companies that operate agricultural insurance, ship insurance, special risk insurance and other types of insurance are, in principle, not allowed to expand their operating areas through the Internet.
5. Property insurance companies are strictly prohibited from expanding their operating areas through the Internet to evade local supervision.
6. Property insurance companies that carry out Internet property insurance business should establish a full-process service system including insurance contract amendment, policy cancellation, claims settlement and complaint handling. If it is not possible to provide full-process services online, property insurance companies should inform financial consumers in a prominent manner before signing the insurance contract, and disclose it on their own online platform or the self-operated online platform of the entrusted insurance intermediary institution; if it is necessary to suspend a certain type of online insurance service due to special reasons, they should inform financial consumers 5 working days in advance, and disclose it on their own online platform or the self-operated online platform of the entrusted insurance intermediary institution.
7. When property insurance companies conduct Internet property insurance business, they should, in accordance with laws, regulations and regulatory requirements, provide a clear and concise operating interface to facilitate financial consumers to query policy information, cancel policies and other operations; accurately confirm the financial consumers' willingness to insure, record and preserve the financial consumers' operation tracks on the sales page and explain the relevant information of the insurance terms to the financial consumers, effectively protect the financial consumers' legal rights such as the right to know, the right to choose independently and the right to fair trade, and do a good job of traceable management.
8. When property insurance companies carry out Internet property insurance business, they should strengthen business risk management in accordance with regulations, actively use scientific and technological means, establish and improve risk monitoring and early warning mechanisms, and build a comprehensive, dynamic and intelligent risk management system.
When property insurance companies carry out Internet property insurance business, they should ensure that their core risk controls are independent and effective. They may not completely entrust core business links that affect risk management to cooperative institutions, and may not solely rely on the data of cooperative institutions to identify, assess and control risks.
Insurance intermediary institutions that cooperate with property insurance companies in conducting Internet property insurance business should provide the property insurance companies with core insurance business information such as customer information, risk control data and anti-money laundering data.
When property insurance companies carry out Internet property insurance business, they should strictly distinguish between online business and online and offline integrated business, establish and improve separation mechanisms, and effectively isolate and prevent operational risks.
9. When property insurance companies carry out Internet property insurance business, they should adhere to compliance and prudent operation and strengthen data security protection.
(I) Property insurance companies and Internet platforms should carefully select partners when cooperating in Internet property insurance business. Establish a mechanism for the entry and exit of partners, clarify the corresponding standards and procedures, conduct full evaluation and due diligence on partners, and implement list management. Negotiate with partners to determine charging items, standards and payment methods in accordance with the principles of "equality, voluntariness, fairness and rationality, quality-price matching, and matching benefits and risks". Maintain business independence and a fair competition market environment. Internet platforms that act as insurance agents should obtain a license to operate insurance agency business.
(II) For Internet property insurance business that provides relevant protection based on specific scenarios, property insurance companies should strictly follow relevant provisions on insurance product supervision, scientifically assess the risk status of specific scenarios, formulate insurance terms and rates fairly and reasonably, and must not develop insurance products in violation of insurance principles.
(III) Property insurance companies that carry out Internet property insurance business should standardize data collection and use, strengthen data management throughout the entire process, clarify the responsibility boundaries of cooperative institutions in data collection, processing, storage, etc., abide by laws and regulations, social morality, and business ethics, and earnestly fulfill their obligations to protect data security. Collect, process, and use personal information in accordance with the principles of legality, legitimacy, and necessity.
10. Insurance intermediaries shall meet the following conditions when conducting intermediary business related to Internet property insurance business:
(1) Professional insurance intermediary institutions should be national institutions;
(2) Having more than three years of experience in property insurance business operation;
(3) The information systems for sales management, policy management, customer service, etc. are complete, the business process management meets the business needs, and the institution itself meets the relevant requirements for traceable management of Internet property insurance business;
(iv) Other conditions prescribed by the Financial Regulatory Authority.
11. Property insurance companies may provide Internet property insurance business landing services to financial consumers through their branches and offline cooperative institutions. Offline cooperative institutions refer to other insurance institutions and their branches, including regional professional insurance intermediary institutions.
(I) Property insurance companies that provide on-site services through their branches should clarify the scope of authorization, strengthen service process management and service quality management, and ensure the organic integration of online and offline services. If the service level of a branch cannot meet the requirements of Internet property insurance business, it should immediately suspend the development of new Internet property insurance business in the local area and promptly inform financial consumers, and make rectifications by improving or adding other forms of on-site services. Only after meeting the requirements can it continue to carry out new Internet property insurance business in the local area.
(II) Property insurance companies that entrust offline cooperative institutions to provide on-site services should carefully select their partners, and offline cooperative institutions should have three years or more of experience in property insurance business services. Property insurance companies that carry out Internet property insurance business serving new citizens and new driving forces may appropriately relax the requirements for the operating time limit of offline cooperative institutions. They should strictly control service capabilities and quality, assume the main responsibility for handling complaints and opinions of financial consumers, and clarify the rights and obligations of both parties, the scope of cooperation, the period of cooperation, the charging items, standards and payment methods, dispute resolution methods, breach of contract liability and handling of financial consumer complaints, information protection and other financial consumer rights protection matters through agreements. They shall not refuse to accept and handle reasonable demands and opinions raised by financial consumers on the grounds of cooperation agreements with offline cooperative institutions. Service evaluations should be carried out at a frequency of no less than once a year. For offline cooperative institutions with problems such as poor evaluation results, many complaints and reports from financial consumers, low service quality, and poor internal management, timely measures should be taken, and relevant matters such as information disclosure and follow-up service plans for the protection of financial consumer rights should be well prepared.
(III) Property insurance companies that operate policy-based and territorial property insurance businesses through the Internet should strictly abide by the requirements of regulatory authorities, industry regulatory authorities, and relevant government functional departments for their on-site services, build a more complete and more powerful on-site service system, invest sufficient technical and human resources, and do a good job in risk management and full-process services.
12. When property insurance companies carry out Internet property insurance business, they should formulate a clear Internet property insurance development strategy, have an internal control management system that is commensurate with the scale of their business, establish a clear Internet property insurance management department, staff it with sufficient professional personnel, and establish mechanisms such as performance evaluation of key Internet property insurance positions, deferred payment of performance-based remuneration, and recovery and recovery.
13. The Financial Regulatory Bureau and its dispatched agencies shall implement routine monitoring and supervision of Internet property insurance business in accordance with the division of responsibilities. If the dispatched agencies in the locations of Internet property insurance business underwriting institutions and on-site service institutions find that the insurance institutions do not meet the operating conditions of this notice, or there are risk problems in the operation process, they may order the insurance institutions to make rectifications within a time limit. If the rectification is not made within the time limit, or the operation seriously endangers the sound operation of the insurance institutions and damages the legitimate rights and interests of the policyholders and the insured, corresponding regulatory measures may be taken in accordance with the law. After the insurance institutions make rectifications, they shall submit rectification reports to the Financial Regulatory Bureau or its dispatched agencies.
14. If a property insurance company does not meet the operating conditions stipulated in Article 2 of this Notice, it shall immediately stop conducting new Internet property insurance business. Within 10 working days from the date of stopping conducting new business, it shall report to the Financial Regulatory Bureau or its dispatched agency responsible for daily supervision, and disclose relevant information on the official website, self-operated online platform, and the self-operated online platform of the entrusted insurance intermediary institution. For insurance contracts that have come into effect, the insurance liability agreed in the contract shall continue to be fulfilled, and follow-up services such as claims settlement shall be provided.
If a property insurance company meets the requirements after rectification, it may resume new Internet property insurance business.
Property insurance companies that resume new Internet property insurance business should report to the Financial Regulatory Administration or its dispatched agencies responsible for daily supervision 20 working days in advance, and proactively disclose relevant information on their official websites, self-operated online platforms, and the self-operated online platforms of entrusted insurance intermediaries, while strengthening public opinion monitoring, response, and disposal.
15. If an insurance institution conducts Internet property insurance business and violates the relevant provisions of this Notice, the Financial Regulatory Bureau and its dispatched agencies may make rectification requirements in accordance with laws and regulations, take relevant regulatory measures or impose administrative penalties.
A transition period will be granted to property insurance companies that have already carried out Internet property insurance business. Property insurance companies should promote rectification on the basis of effectively protecting the legitimate rights and interests of financial consumers and fully comply with the requirements of this notice before December 31, 2024.
16. If any previous regulations on Internet property insurance business are inconsistent with this Notice, this Notice shall prevail.
State Financial Supervision and Administration Bureau
July 17, 2024
(Please forward this notice to all insurance intermediaries within your jurisdiction)
Hu Zhiting, reporter of The Paper
(This article is from The Paper. For more original information, please download the "The Paper" APP)
