CIRC Issues Guidelines on Determining Premium Rates for Products of Property Insurance Companies
Recently, the China Insurance Regulatory Commission ("CIRC") has released the Guidelines on Determining Premium Rates for Products of Property Insurance Companies (the "Guidelines") which will enter into force as of February 1, 2017.
The Guidelines include main regulations in three aspects as follows. The first is to describe the composition of premium rates and principles for determining such premium rates in a normative manner, as the applicable scope, definitions of certain terms related to the determination of premium rates, and accountability mechanism are standardized. The second is to regulate specific procedures for determining the said premium rates, including the early-stage preparations, processes of such determination, monitoring and adjustment thereof. In the early stage of preparations, normative requirements are mainly provided for the essential data used for determining premium rates, including the data source, contents, data extraction and management regime, data verification and correction etc., and in particular, insurance companies are required to keep and maintain records of the methods for extracting data. The third is to provide for the supervisory and administrative measures for defining products' premium rates, including requirements on the actuarial reports on premium rates and the working papers for determining premium rates, and accountability-related provisions.