Standards for Confirming Relations between Insurance Applicants and Insurants or Beneficiaries Regulated
Recently, the General Office of the People's Bank of China and the General Office of the China Insurance Regulatory Commission have distributed the Circular on Matters relating to Confirmation of the Relations between the Insurance Applicants and the Insured or Beneficiaries (the "Circular").
The Circular clearly states that while concluding contracts of life insurance, giving indemnity or making payment of insurance benefits, insurance companies shall confirm the relations between the insurance applicants and the insured or beneficiaries according to provisions of Article 12 and Article 14 of the Administrative Measures for the Identification of Financial Institution Clients and the Preservation of Clients' Identities and Transaction Records. According to the Circular, there are four different methods, including "verifying documents that prove such relations", for insurance companies to confirm such relations between the insurance applicants and the insured or beneficiaries, and any insurance company shall adopt at least a method for such confirmation of relations. Besides, the Circular also states that for clients that are less likely to be involved in money laundering and financing for terrorism and opt for products with low risks, insurance companies may give simplified due diligence investigations and take streamlined measures for risk control, but shall verify the relations between the insurance applicants and the insured or beneficiaries later at the phase of insurance surrender, identity or payment.