Industry News | The State Administration of Financial Supervision issued the Measures for the Administration of Insurance Sales

In order to protect the legitimate rights and interests of policyholders, insured persons, and beneficiaries, regulate insurance sales behavior, and unify the regulatory requirements for insurance sales behavior, in accordance with laws and documents such as the Insurance Law of the People's Republic of China and the Guiding Opinions of the General Office of the State Council on Strengthening the Protection of Financial Consumer Rights and Interests, the State Administration of Financial Regulation has recently issued the "Measures for the Administration of Insurance Sales Behavior" (hereinafter referred to as the "Sales Measures"), Effective from March 1, 2024.

The Sales Measures consist of 6 chapters and 50 articles, dividing insurance sales behavior into three stages: pre sales behavior, in sales behavior, and post sales behavior. The characteristics of each stage are distinguished and regulated separately.

One is behavior management before insurance sales, which regulates the business scope, information system, terms, information disclosure, product classification and grading, sales personnel grading, sales promotion, etc. of insurance companies and insurance intermediaries.

The second is behavior management in insurance sales, which requires insurance companies and insurance intermediaries to understand customers and sell appropriately. It is prohibited to force tying and default checking, inform identity and related matters during sales, and provide explanations for reducing liability and exemption

The third is post insurance sales behavior management, which requires policy delivery, follow-up, notification of long-term insurance personnel changes, prohibited behavior after personnel changes, and surrender.

The "Sales Measures" are an important measure taken by the State Administration of Financial Regulation to implement the people-centered development concept and effectively enhance the sense of gain for insurance consumers. They are the fundamental link in improving the behavioral supervision system and constructing a regulatory framework for insurance sales behavior. The introduction of the "Sales Measures" reflects the political and people-oriented nature of financial regulatory work, helps to improve the standardization of sales behavior in the insurance industry, and effectively enhances the sense of gain and satisfaction of insurance consumers.

State Administration of Financial Regulation Answers to Journalists' Questions on the "Management Measures for Insurance Sales Behavior"

In order to protect the legitimate rights and interests of policyholders, insured persons, and beneficiaries, regulate insurance sales behavior, and unify the regulatory requirements for insurance sales behavior, the State Administration of Financial Regulation recently released the "Measures for the Management of Insurance Sales Behavior" (hereinafter referred to as the "Sales Measures"). The heads of relevant departments answered questions from reporters.

1、 What is the background of the development of the Sales Measures?

Answer: Insurance sales behavior directly affects the rights and interests of insurance consumers. In recent years, regulatory authorities have received a large number of disputes and complaints caused by non-standard insurance sales. Through the "Sales Measures", it is clarified who can sell insurance products, how to sell insurance products, and what obligations insurance institutions and insurance consumers each have to fulfill in the insurance sales process. Comprehensive regulation of insurance sales behavior is carried out from the front end, achieving source governance, and better safeguarding the legitimate rights and interests of insurance consumers.

2、 What is the main content of the "Sales Measures"?

Answer: The "Sales Measures" consists of 6 chapters and 50 articles, including general provisions, behavior management before insurance sales, behavior management during insurance sales, behavior management after insurance sales, supervision management, and supplementary provisions.

The scope of application, principles and classifications of insurance sales behavior, as well as the public education and information security protection obligations that insurance companies and insurance intermediaries need to bear are clearly defined in the general provisions. The second, third, and fourth chapters take the process of insurance sales as the main line, and respectively make provisions for the behavioral rules before, during, and after insurance sales. Among them, the second chapter "Behavioral management before insurance sales" mainly stipulates the scope of insurance sales business, insurance product information disclosure, insurance marketing promotion behavior, as well as the technical preparation, personnel preparation, and channel preparation for insurance sales; Chapter 3 "Behavior Management in Insurance Sales" mainly stipulates the obligation of insurance companies to inform, explain, inquire, prohibit forced tying, and prohibit proxy signatures; Chapter 4 "Post sale behavior management of insurance" mainly stipulates the accompanying obligations of insurance companies based on the conclusion of insurance contracts. Chapter 5 clarifies relevant regulatory requirements and stipulates administrative responsibilities for violations of these Measures. The supplementary provisions stipulate the connection, interpretation, and implementation time of these measures with other regulatory systems.

3、 The "Sales Measures" divide insurance sales behavior into three stages: pre sales, in sales, and post sales. Can you provide a specific introduction?

Answer: Insurance sales behavior is a series of activities carried out by insurance companies to achieve the conclusion of insurance contracts with policyholders. It is a continuous behavior with a time span rather than a point in time behavior. In order to enable the regulated objects to have a clearer understanding of the requirements for managing insurance sales behavior, the "Sales Measures" divide insurance sales behavior into pre sales behavior, in sales behavior, and post sales behavior.

Pre sales behavior of insurance refers to the behavior of insurance companies, insurance intermediaries, and other institutions entrusted by them to create an environment, prepare conditions, and solicit counterparties for the conclusion of insurance contracts. The behavior in insurance sales refers to the communication and negotiation between insurance companies and their entrusted insurance intermediaries, other institutions, and specific counterparties regarding the content of insurance contracts, making offers and commitments. The post sale behavior of insurance refers to the behavior of insurance companies and their entrusted insurance intermediaries and other institutions in fulfilling the accompanying obligations of policy delivery, follow-up, information notification, file management, etc. based on the conclusion of insurance contracts. The key points to distinguish between pre insurance sales behavior and mid insurance sales behavior are whether the relative parties involved in insurance sales behavior are specific, and whether the insurance sales behavior has entered the stage of communication, negotiation, and making offers and commitments regarding the specific content of the insurance contract.

4、 What are the considerations behind the establishment of an insurance product description system in the Sales Measures?

Answer: As a legal document that stipulates the rights and obligations of both parties to an insurance contract, insurance product clauses need to include various elements stipulated by law, with a large amount of content and a long length. The content directly related to the economic interests of policyholders, insured persons, and beneficiaries is scattered throughout the clauses, making it difficult to read and understand. The "Sales Measures" stipulate that insurance companies shall publish insurance product descriptions on their official websites, highlighting the scope of protection, clauses exempting or reducing the insurer's liability, expected returns, and the rights and obligations of policyholders, insured persons, and beneficiaries, in order to understand the core content of insurance product terms in situations where the attention of policyholders, insured persons, and beneficiaries is limited; At the same time, it is stipulated that before the policyholder applies for insurance, the insurance company, its entrusted insurance intermediaries, and insurance sales personnel must provide the policyholder with an explanation of the insurance product. This system mainly aims to provide more sufficient positive information support for protecting the right to know of insurance consumers.

5、 Consumers all hope to buy insurance products that are suitable for them. Are there any relevant provisions in the Sales Measures to improve the appropriateness of products?

Answer: The "Sales Measures" propose requirements for the appropriateness of insurance products from four perspectives. One is to require insurance companies to establish a hierarchical management system for insurance products, classifying and grading their insurance products based on standards such as product complexity, insurance premium burden level, and risk level of policy benefits. The second is to require insurance companies and insurance intermediaries to support industry self-discipline organizations in leveraging their platform advantages to promote the classification of sales capabilities of insurance sales personnel. Within the sales capability classification framework developed by industry self-discipline organizations, a qualification classification management system for insurance sales capabilities of their own institutions should be established based on their actual situation, with the professional knowledge, sales ability, integrity level, and moral status of insurance sales personnel as the main standards, Grading insurance sales personnel and linking them with the insurance company's insurance product grading management system, implementing differentiated authorization based on sales capabilities and qualifications, and clarifying the insurance products that can be sold by insurance sales personnel at each level. The third requirement is that insurance companies, insurance intermediaries, and insurance sales personnel should advise the policyholder to terminate the insurance if they find that the policyholder is not suitable for a certain insurance product when selling insurance. The fourth requirement is that during the sales process, the policyholder shall sign or confirm the insurance declaration, insurance reminder, explanation of exemption or reduction of the insurer's liability clause, and relevant regulatory documents in writing or other forms that can be saved.

The above content is sourced from the National Financial Supervision and Administration

Attachment: Management Measures for Insurance Sales Behavior

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