News eDaily22 May 2017

China:Regulator cracks down on mis-selling and fraudulent sales

22 May 2017

The Chinese insurance regulator has said that it is strengthening its supervision of the sales management of life insurance companies, as it continues to tighten its oversight of the insurance industry.

In a notice issued last Friday, CIRC directed life insurers to conduct a self assessment of their sales management activities to ensure compliance with regulations. The self examination is to cover areas like product management, information disclosure, marketing information, customer review, renewal services and customer complaint handling.

The focus is on “whether the insurers' operating behaviour complies with the law and regulations, whether internal controls are complete and effective and whether information disclosure is truthful and complete”.

At the same time, CIRC ordered its bureaux throughout the country to maintain a high-alert approach, and to place priority on conducting audits of insurers' sales activities. It said that a thorough investigation has to be carried out, and executives held accountable, in cases where consumers had been misled by false marketing into buying insurance policies.

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