The China Insurance Regulatory Commission ("CIRC") has recently issued the Guide to Anti-Insurance Frauds (the "Guide"), effective from April 1, 2018.
The Guide clearly sets forth insurance institutions' subject responsibilities for fraud risk management, duties of the CIRC and its local branches, and duties of all related authorities under the mechanism of anti-fraud collaboration and coordination. According to the Guide, insurance frauds mainly include frauds involving insurance benefits, frauds involving illegally doing insurance business, and frauds involving deception in insurance contracts. Insurance institutions shall establish and optimize the framework of fraud risk systems and the organizational structure, make clear the respective roles and duties of the board of directors as well as special committees thereunder, the board of supervisors (supervisors), the management and related authorities in the fraud risk management, and specify whom they shall report to respectively. Moreover, the Guide notes that the CIRC and its local branches shall launch periodic checks and evaluations to look at the comprehensiveness and effectiveness of each insurance institution's fraud risk management framework, and constantly supervise insurance institutions' fraud risk management by means of the regulatory rating, risk warning, notification, interviews or otherwise.