The China Banking and Insurance Regulatory Commission tightened regulations on commercial auto insurance premium rates, in a bid to address competition issues in the segment.
Property and casualty insurance companies have to report how they apply discount coefficients on new commercial auto insurance business and how they pay insurance intermediaries and agents commissions to the CBIRC, the regulator said in a July 20 press release.
For approval of new commercial auto insurance products, Chinese P&C insurers should put together products in compliance with these new measures. Existing commercial auto insurance products are allowed to be sold until Sept. 30.
Three pilot regions for full market-based auto insurance pricing, Shaanxi and Qinghai provinces and Guangxi Zhuang Autonomous Region, are exempted from the new rules.
China has launched several rounds of pricing reforms for commercial auto insurance since June 2015. Outside Shaanxi, Qinghai and Guangxi, insurers can offer customers commercial auto insurance premiums as low as 25.32% of the benchmark premium, based on factors such as driver and vehicle records.