China tightened rules for online insurance sales, seeking to root out irregularities in a burgeoning business that has bolstered platforms like Waterdrop Inc. and Huize Holding Ltd.
The new regulations allow qualified insurers and brokers to sell online life insurance nationwide while banning those that fail to meet requirements including a 120% minimum solvency ratio for four consecutive quarters, according to rules released Friday by the China Banking and Insurance Regulatory Commission.
“Improper innovation” and “disorderly competition” by some players had hurt consumer rights and led to soaring complaints, the CBIRC said in a
The watchdog has been
Beijing-based Waterdrop, the insurance tech company that
Insurers should “prudently” choose brokers as partners to sell their products online, and strictly manage their marketing behavior, according to the new rules. Products eligible for internet sales are limited to accidental, health, term life insurance and a few others.
The new rules take effect immediately on any new online life business. Companies need to bring existing business into compliance by the end of the year, or stop online sales from Jan. 1 if they fail.