China will launch another cleanup of irregular life insurance products in the sector to prevent liability risks.
The China Banking and Insurance Regulatory Commission on May 4 published a negative list of life insurance products and asked life insurers to conduct self-examinations by June 30. The negative list covers life insurance clause, design, rate determination, actuarial assumption and application requests to the regulator.
The CBIRC said insurers cannot market insurance products as other financial products such as trust, bank wealth management products or funds.
Life insurers are also not allowed to shorten annuity insurance products' effective duration through early premium refund, design participating life insurance products as universal life insurance products, nor provide value-added investment services for medical insurance products.
The regulator added that short-term health insurance products cannot be marketed as long-term insurance.
After insurers conduct self-examinations, the regulator will verify and conduct spot checks on existing life insurance products in the market. If companies are found to violate rules, they will be forbidden from applying for new products for a certain period.
The negative list comes after China's insurance regulator vowed to crack down on irregular sales practices among life insurers around the turn of the calendar year and published tough new rules on life insurance policy design in May 2017.
The latest notice covers a more comprehensive negative list in a bid to clean up existing irregular life insurance policies.