China's insurance regulator has called on the industry to engage fully in self discipline to contribute to the stable and healthy development of the sector. In this, CIRC stressed the role of the Insurance Association of China (IAC) in the self regulation and improvement of the sector.
In a speech, delivered at the 2017 IAC Seminar and published on the CIRC website last Saturday, the Commission's Vice Chairman Mr Liang Tao said that the insurance industry should be the Chinese economy's “shock absorbers” and society's “stabilisers”.
Role of IAC
He stressed that industry self regulation is the core work of the IAC, foremost among its several functions that also include industry exchanges, information dissemination, protection of rights and provision of services. He said that self discipline is an urgent requirement under existing external conditions as well as an inherent requirement of an industry association.
He said that the IAC plays an important role in the implementation of reforms in the industry, assisting also in the research and development of reform programmes to determine model terms and basic rates for the industry. The association also undertakes a role in the development of industry competition rules, maintenance of market order, and assessment of insurance companies' risk. It fills a gap in the regulation of the insurance industry.
Mr Liang said that the IAC not only can influence and intervene in an insurance company's market behaviour, but it can also play a proactive role in pushing for improvements in internal controls by insurance organisations, strengthening information disclosure, build a community monitoring platform, etc, that would contribute to strengthening risk management in the insurance industry.
He noted that the IAC had issued more than 20 industry operating procedures and standards to date. He said that the IAC has next to set standards targeted at correcting disorder in the market.
He also called on the IAC to help improve the calibre of people working in the insurance industry, particularly insurance agents whose numbers have jumped in recent years. The IAC has to address the shortage of professional and technical manpower in the industry by increasing training in the sector, including online training.
Mr Liang also said that a path would be drawn up for the future development of the IAC.
The CIRC exhortations at the IAC seminar followed the National Financial Work Conference held on 14-15 July. At the latter, the government stressed the need to improve the risk management framework of the financial industry, strengthen internal controls, and push financial institutions to reveal risky assets in a timely and truthful manner. At the financial conference, which is held once every five years, President Xi Jinping announced the creation of a cabinet-level committee to coordinate oversight of financial services – which is currently divided mainly among four regulators including the CIRC.