The General Office of the China Banking and Insurance Regulatory Commission ("CBIRC") has recently issued the Circular on Matters Concerning Further Tightened Regulation of Vehicle Insurance (the "Circular").
Aimed at addressing two issues existing in the current vehicle insurance market which are the failure to follow, as required, insurance premium rates set out in clauses of vehicle insurance policies and the untruthfulness of financial data for vehicle insurance business, the Circular proposes the following measures. First, all local branches established by the CBIRC shall, within the scope of their duties, detect, investigate and punish violations in respect of vehicle insurance business committed by property insurance agencies within their respective jurisdiction. Second, the Insurance Association of China ("IAC") shall establish a mechanism to accept and verify complaints and reports against its members, and timely refer clues to any possible violations to the CBIRC's Property Insurance Department. Third, the China Insurance Information Technology Management Co., Ltd. ("CIITC") shall institute a mechanism to monitor data related to the practically adopted vehicle insurance premium rates and report any unusual data in a timely fashion to the CBIRC's Property Insurance Department.