News Life and Health11 Jan 2018

China:CIRC to allow viatical settlement pilot scheme

11 Jan 2018

China's top insurance regulator has said that it would allow the trial of viatical settlement that could lead to an increase in premiums and strong returns.

A viatical settlement allows a third party to invest in another person’s life insurance policy at a discount from its face value. The buyer of the policy however continues to pay the monthly premium but receives the full benefits when the original policyholder dies.

The CIRC on Monday posted a draft rule on its website on the upcoming two-year trial programme of viatical settlement, and is soliciting public opinion until 26 January, reported the South China Morning Post.

Under the new trial planned by CIRC, analysts said consumers will have an incentive to buy insurance products as policies become tradeable, thus shoring up premiums for insurers. Market watchers expect premium growth and investment return to remain strong this year.

“The new practice, once put into effect, can make insurance products more attractive,” said Mr Kelvin Chu, an analyst at UBS, in Shanghai

To take part in the trial, institutions must have a minimum registered capital of CNY500 million (US$77 million).


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Recent Comments


How is the principle of insurable interest satisfied in such cases?

11 January 2018


It will help both Policyholders as well Insurers. For Policyholder he gets an better value and insurer will expect an steady premium payment . as far as the Insurable Interest component is there we can draw some inferences from Assignment concepts. This will enable in channelizing the separate financial markets for Insurer for such trades.

18 January 2018


In the U.S., a policy owner must have insurable interest when the policy is issued by the life insurance carrier. Once a policy is in force, the policy owner has the contractual right to transfer the ownership to any third party, insurable interest for subsequent owners is no longer required. Typically, a transfer would only occur after the 2 year contestable clause has passed.

19 January 2018

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