“Measures for the management of life insurance sales behavior” for comments, which is more practical and relatively relaxed than the first edition
According to the Shanghai Securities News, on April 15, 2022, the China Banking and Insurance Regulatory Commission issued the measures for the administration of life insurance sales (Draft for comments) (hereinafter referred to as the “draft for comments”) to insurance companies to solicit opinions from the industry on the measures for the administration of life insurance sales. The “opinion draft” has a total of 85 articles in eight chapters, which intends to standardize the whole process of life insurance pre-sales behavior, in-sales behavior and post-sales behavior of insurance companies, insurance intermediaries and insurance salespeople. The “opinion draft” specifically puts forward requirements from many aspects, such as management system, information system, internal control of sales management, sales compliance management department, selection of cooperative institutions, division of responsibilities of insurance institutions, management responsibilities of insurance salespeople, etc. This version of the “opinion draft” is improved and adjusted based on the version reported in November 2021. Some contents are deleted, adjusted and modified, which is expected to be more practical and relaxed than the previous version.
Mainly adjust the Commission, product classification and personnel classification, and the margin is good for the increase of employees in the industry and the retention of new employees
According to WeChat official account, the version of “draft” is adjusted to a certain extent compared with the version issued in November 2021. The main adjustment is: (1) in terms of commission, this version will delete “the first phase fee shall not be higher than the premiums 80%” and “the initial Commission shall not be higher than the 40% of the direct commission of the insurance policy”. Clear principled provisions: the proportion of commission in the total premium is limited by the additional fee rate of the products sold (which is basically consistent with the operation of current insurance enterprises). This adjustment will help to ensure the attraction of the industry and the interests of employees; (2) In terms of product classification and personnel classification, this edition requires insurance companies and insurance intermediaries to establish a hierarchical management mechanism for insurance salespeople and implement hierarchical management for salespeople. Accordingly, the “opinion draft” classifies life insurance products into three categories according to product type, complexity and risk level. It is expected that the implementation level will still be managed according to the corresponding classification, However, this edition implicitly broadens the scope of products that new agents can sell, which is conducive to the increase and retention of new employees on the liability side; (3) In addition, this version of the draft clearly does not open the resident sales of bancassurance, and standardizes the management of self insurance parts and mutual insurance parts. At the same time, it is clear that insurance companies should carry out demand analysis, risk tolerance and payment ability assessment for policyholders, and stop bundling health and elderly care services, which is consistent with the tone of regulating sales and protecting consumers’ rights and interests advocated by the CBRC.
The core of protecting consumers’ rights and interests remains unchanged, and the official document may be the cornerstone of the high-quality development of the industry
This version of the “opinion draft” has some changes compared with the previous version, which is more in line with the actual business, but the core of promoting the high-quality transformation of the industry and protecting the rights and interests of consumers has not changed. Strengthen the management responsibilities of insurance companies and insurance intermediaries, reduce misleading sales through product classification and personnel classification, comprehensively evaluate the product matching degree based on customer needs, risk level and payment ability, reasonably distribute the Commission proportion, and balance business demands and customer interests. After the official document is issued, it may become the cornerstone document for the high-quality transformation and development of the industry. In the short term, this version of the opinion draft is relatively loose compared with the previous version, which is expected to maintain the attraction of increasing staff in the industry and the stability of the agent team, with limited short-term impact on the premium; In the long run, product classification and personnel classification will effectively reduce the misleading sales on the liability side. Sales based on customer needs and payment ability are expected to guide the industry to return to the source of guarantee and benefit the long-term and healthy development of the industry.
The liability side of the life insurance industry is under short-term pressure, paying attention to the impact of the epidemic on automobile insurance and the marginal improvement of asset side
The liability side of life insurance is under short-term pressure due to the epidemic, low manpower, industry transformation and slow release of demand. The industry NBV may be under obvious pressure in the first quarter of 2022. This version of the “opinion draft” may provide policy guidance for the high-quality transformation of the industry. The prosperity of property insurance is affected by the epidemic situation in some areas, which needs to be observed. At present, life insurance is at the bottom of valuation, and the pessimistic expectation response on the liability side and asset side is relatively sufficient. However, the impact of the epidemic, the macroeconomic boom in 2022 and NBV in the process of transformation are still uncertain year-on-year. In terms of life insurance, we recommend Ping An Insurance (Group) Company Of China Ltd(601318) , which has a large space for asset side repair, China Pacific Insurance (Group) Co.Ltd(601601) , which is leading in transformation, and China Property Insurance (H-share) and China Life Insurance Company Limited(601628) .
Risk tip: the long-term interest rate is lower than expected; The epidemic has repeatedly restricted offline activities.
