Administrative Measures for the Information Disclosure in Relation to New Varieties of Personal Insurance Products
Administrative Measures for the Information Disclosure in Relation to New Varieties of Personal Insurance Products
Administrative Measures for the Information Disclosure in Relation to New Varieties of Personal Insurance Products
Order of the China Insurance Regulatory Commission [2009] No. 3
September 25, 2009
Administrative Measures for the Information Disclosure in Relation to New Varieties of Personal Insurance Products, which have been adopted at the executive meeting of the China Insurance Regulatory Commission on September 18, 2009, are hereby promulgated and shall come into effect on October 1, 2009.
Wu Dingfu, CIRC President
Administrative Measures for the Information Disclosure in Relation to New Varieties of Personal Insurance Products
Chapter I General Provisions
Article 1 For the purpose of promoting the healthy development of the personal insurance industry, protecting the lawful rights and interests of insurance policyholders, insurants and beneficiaries and safeguarding social and economic orders and public interests, these Measures are hereby formulated in accordance with Insurance Law of the People's Republic of China.
Article 2 For the purpose of these Measures, "new varieties of personal insurance products" (hereinafter referred to as "new varieties of products") shall refer to investment-linked insurance, universal insurance, participating insurance and other insurance products recognized by the China Insurance Regulatory Commission (hereinafter referred to as CIRC) as new varieties of products.
Article 3 For the purpose of these Measures, "information disclosure" shall refer to such activities of personal insurance companies (hereinafter referred to as "insurance companies") and their agents as describing the features of new varieties of products, illustrating policy benefit projections and presenting relevant information like business performance to policyholders, insurants, beneficiaries and the general public.
Methods of information disclosure include, but are not limited to, the following:
1. Description and presentation on media or company websites;
2. Description and presentation in product presentation meetings;
3. Description and presentation by salespeople;
4. Follow-up by customer service people; and
5. Regular distribution of reports and materials.
Article 4 Insurance companies shall prepare product disclosure statement and insurance purchase notice for new varieties of products they intend to offer and undergo information disclosure processes in accordance with the provisions of these Measures.
Article 5 Information disclosures in relation to new varieties of products shall be conducted in simple and plain languages which convey product related information accurately. Insurance companies shall be responsible for the objectivity and authenticity of the information disclosed and shall ensure that there are no major omissions. Insurance companies shall not deceive, mislead or conceal information from policyholders, insurants, beneficiaries and the general public.
Article 6 Insurance companies, during sale of new varieties of products, shall provide insurance applicants with insurance terms and product disclosure statements. Insurance purchase notice shall be presented where new variety of products is sold to individuals.
Where an insurance contract incorporates the standard policy clauses of an insurance company, said standard policy clauses shall be attached to the insurance policy presented to the insurance applicant by the insurance company. The insurance company shall explain the content of the insurance contract to the insurance applicant.
Where new variety of products is sold to individuals, the insurance policies provided by the insurance companies shall include an applicant confirmation column under which the applicants shall write down the following words followed by their signatures: "I have read the insurance terms, the product disclosure statement and the insurance purchase notice and I am aware of the features of the product as well as the uncertainty of policy benefits."
Article 7 Insurance companies shall include high, medium and low benefit scenarios in the benefit payout illustrations they give for new variety of products in product disclosure statements and other promotional materials.
Benefit illustrations shall be conducted with prudence at all times. The assumed return on investment rates for illustrating benefits of participating insurance and investment-linked insurance policies and the assumed interest rates for illustrating benefits of universal insurance polices shall not exceed the upper limits set by CIRC.
Article 8 Insurance companies and their agents may not include in their information disclosure for new varieties of products simplistic comparisons between said new varieties of products and other insurance products or bank deposits, funds or public debts using ratio indices and may not engage in promotion that mislead or deceive insurance policyholders, insurants, beneficiaries and the general public.
Article 9 Insurance companies shall establish a follow-up system for new varieties of products with a term of over one year except in the case of group insurance. The follow-up system shall include such elements as times, methods, contents and success rates of the follow-ups and how problems are dealt with.
Article 10 Insurance companies shall conduct follow-ups with policyholders of new varieties of products within their respective cooling-off periods. The follow-ups shall first be attempted through phone calls which shall be recorded. If an attempt to conduct a telephone follow-up fails, such methods as mail correspondence or face-to-face interview can be adopted in which case a confirmation sheet signed by the policyholder shall be obtained. Insurance companies shall keep detailed records of unsuccessful follow-ups and reasons thereof.
Insurance companies shall keep audio records of follow-up phone calls as well as other evidence of follow-up activities in an appropriate manner. Such records and evidence shall, from the date of termination of the insurance contract, be further kept for no less than 5 years if the insured period is not more than one year or for no less than 10 years if the insured period is more than one year.
Chapter II Administration of Information Disclosure Materials
Article 11 Chief actuaries and persons in charge of legal affairs in insurance companies shall ensure that product disclosure statements are objective, authentic and free of major omissions and meet relevant requirements of these Measures on information disclosure.
Article 12 Information contained in other disclosure materials of new varieties of products provided by insurance companies shall be consistent with that in insurance terms and product disclosure statements.
Article 13 Illustrations of future benefit payouts conducted by insurance companies for insurance applicants, insurants, beneficiaries and the general public in whatever form shall meet the requirements of these Measures.
Article 14 Information disclosure materials of new varieties of products shall be centrally managed by insurance companies.
Where disclosure materials of new varieties of products are being designed and printed by the provincial branches of insurance companies, reports of such shall be made to the headquarters of the companies for approval.
......