The General Office of the China Banking and Insurance Regulatory Commission ("CBIRC") has recently issued the Circular on Matters concerning Adjustments to Long-term Medical Insurance Premium Rates (the "Circular").
The Circular sets out requirements in five respects: 1. clearly defining the scope of medical insurance products of which the premium rates are adjustable; 2. clarifying the basic requirements for adjustments to premium rates; 3. stipulating the product clauses and relevant contents of the product description; 4. clarifying the information disclosure requirements regarding adjustments to premium rates; and 5. regulating sales activities of insurance companies and providing for the regulatory measures for violations. The Circular mandates that insurance companies formulate the premium rate adjustment measures to clearly specify the conditions to trigger an adjustment to premium rates, the internal decision-making mechanism and the work procedures. The first-time adjustment to the premium rate should not be earlier than three years after the insurance product is offered and sold in the market, and the interval between any two adjustments should not be less than one year. Insurance companies should not subject the insured persons with different health conditions to differential policies for adjustments to premium rates. In addition, the Circular states that an insurance company shall disclose on its official website how the premium rates are adjusted and relevant product information and make public adjustments they make to the premium rates.