China’s new insurance law will take effect on October 1 2009. The revised law strengthens protection for policyholders, the insured, and beneficiaries. However, it adds operational requirements for insurance companies. For example, the revised law adds a two-year incontestable rule to protect the insured party. It is a very common clause in Western countries, but not in China. The revised law also requires insurance companies to pay or decline a claim within 30 days; if more documentation from the claimant is needed, the insurance company has to inform the claimant about all the documents needed at one time.
All these requirements aim to settle the problem of the “easy to apply, hard to claim” environment. I see end customers’ preferences are changing from investment type products to protection type products. A simpler claim environment is crucial for the development of China’s insurance industry. That’s why regulators emphasized claims when revising the insurance law.
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