The new regulation on comprehensively regulating the sales process of the life insurance industry is being drafted, and the industry has been consulted again recently.
In November last year, the draft of the measures for the administration of life insurance sales was circulated in the industry. Recently, the reporter learned from the industry that the name of the new regulations for comments was slightly different and changed to the measures for the administration of life insurance sales, and the content also changed a lot compared with the draft of last year’s version. The length of the main chapters decreased from 1.09 million to 8.5 million based on different sales regulations, and the total length was increased from 7.85 million chapters.
In terms of content, in terms of the classification of insurance salespeople concerned, the new opinion draft no longer defines the classification method, but requires insurance companies and insurance intermediaries to establish a classification management mechanism for insurance salespeople and implement classification management for insurance salespeople in accordance with the sales ability qualification standards of insurance salespeople issued by China Insurance Industry Association.
By the end of 2021, 92 life insurance companies had 4.728 million registered salespeople.
sales staff grading is planned to be completed by the end of 2021
The management of life insurance salespeople, especially hierarchical management, is a focus of this sales management method.
In terms of hierarchical management of insurance salespeople, the draft of opinions in November last year stipulates in detail that “insurance institutions should establish and implement a hierarchical management system for salespeople… The level system should be no less than four levels, and level 1 is the lowest level. Salespeople should be promoted from low to high within the hierarchical management system, and the first grade of newly employed salespeople should be level 1.”
The new draft only stipulates the direction and division of labor to the insurance industry association, which requires: “insurance companies and insurance intermediaries shall establish a hierarchical management mechanism for insurance salespeople and implement hierarchical management for insurance salespeople in accordance with the sales ability qualification standards of insurance salespeople issued by the China Insurance Industry Association.”
At the same time, the new version of the draft also establishes a transition period for the grading adjustment of sales personnel: from the date of promulgation of these measures, insurance companies and insurance intermediaries shall gradually implement the grading management of insurance sales personnel in accordance with the standards formulated by the China Insurance Industry Association. The new insurance sales personnel shall meet the requirements before December 31, 2023, and the existing insurance sales personnel shall all meet the requirements of these provisions before December 31, 2024.
Before that, the classification direction of insurance salesperson was put forward. In May 2020, the notice on implementing the main responsibility of insurance companies and strengthening the management of insurance salespeople issued by the CBRC proposed to support the industry to promote the grading of sales ability and qualification of salespeople. It is required that insurance companies should comply with the requirements of high-quality development of the insurance industry, support industry self-discipline organizations to give full play to the advantages of the platform and promote the grading of sales ability of salespeople. China Insurance Industry Association and local industry self-discipline organizations shall study and establish a sales ability qualification grading system and corresponding training and testing mechanism for salespeople in combination with the types of insurance products.
management of sales appropriateness of product classification requirements
The classification of sales personnel is only a part of the administrative measures. The new draft focuses on the classification of sales personnel and products, the differentiated authorization of sales personnel, and requires insurance institutions to establish a product sales appropriateness management system, and evaluate the insurance demand, risk tolerance and payment ability of policyholders.
According to the new version of the opinion draft: insurance companies should carry out hierarchical and classified management of life insurance products according to different types, complexity and risk levels of life insurance products, from low to high:
Category I: accident insurance, health insurance (except those listed in Category II), ordinary life insurance;
The second category: dividend type and universal life insurance, annuity insurance, tax excellent health insurance, long-term health insurance with adjustable rate, long-term care insurance, tax deferred endowment insurance and exclusive commercial endowment insurance;
The third category: investment linked insurance, variable annuity insurance.
Life insurance products that are not clearly classified into the above three categories shall comply with the relevant provisions of the regulatory authorities.
In terms of product differentiation authorization, the new draft stipulates that insurance companies and insurance intermediaries should follow the standards determined by China Insurance Industry Association and carry out differentiated authorization for the products that can be sold by insurance salesmen according to the classification results of insurance salesmen and the classification of insurance products. The scope of product authorization should match the level of insurance salesperson, and gradually expand with the promotion of insurance salesperson. Insurance companies and insurance intermediaries shall establish a catalogue of products that can be sold by insurance salespeople at all levels. For products within the scope of authorization, insurance salespeople must be trained and tested to be qualified before authorization.
In terms of sales appropriateness management, the new opinion draft stipulates that when consumers buy long-term life insurance products, insurance companies and insurance intermediaries should carry out the insurance demand analysis, risk tolerance and payment ability evaluation of the applicant before applying for insurance, and recommend the appropriate insurance products according to the analysis and evaluation results, so as to match the product characteristics with the customer’s needs, risk tolerance and payment ability. It is also proposed that the China Insurance Industry Association can formulate industry standards for consumer insurance demand analysis, risk tolerance and payment ability evaluation.
The draft also formulates the provisions of “recommended termination of insurance”: insurance companies and insurance intermediaries should clarify the criteria for termination of insurance when consumers and insurance products do not have appropriateness, and follow the relevant regulatory provisions on the appropriateness management of Bancassurance institutions.
live broadcast and other channel sales should ensure content compliance
The new draft also makes relevant provisions on new situations such as Wuxi Online Offline Communication Information Technology Co.Ltd(300959) integrated sales.
It stipulates that if insurance companies and insurance intermediaries carry out life insurance sales through live broadcast, we media account, Internet Group and other new network channels Wuxi Online Offline Communication Information Technology Co.Ltd(300959) integration, they shall formulate strict pre quality inspection process and standard audio and video recording requirements, designate compliance personnel to review the live broadcast or access relevant We Media account and Internet Group, and completely save relevant video, audio and graphic materials, Ensure that the sales promotion content meets the regulatory requirements, and implement the traceability management requirements according to the key links of insurance sales behavior.
“The personnel who carry out life insurance sales through new network channels such as live broadcast, we media account and Internet group shall be insurance salesmen authorized by insurance companies and insurance intermediaries; other personnel shall not publicize or sell life insurance products through live broadcast, we media account and Internet group.” Provisions of the new version of the opinion draft.
The draft also stipulates the management contents of self insurance and mutual insurance. For example, insurance companies and insurance intermediaries shall not purchase life insurance products as a condition for insurance salespeople to join the company, become regular or promote, and shall not allow self insurance parts and mutual insurance parts to participate in any form of performance assessment and business competition. Insurance companies and insurance intermediaries shall continue to strengthen the monitoring of risk indicators of self insurance and mutual insurance, and take necessary management and corrective measures for branches and insurance sales personnel with obvious abnormal monitoring results.
