The China Banking and Insurance Regulatory Commission has warned the public that members of the insurance sector are selling non-insurance financial products in breach of regulations.
CBIRC issued a warning on 30 April pointing out that a number of insurance sector professionals have sold P2P or other non-insurance financial products to consumers by fraudulently claiming that they are insurance products, as well as sought to heighten sales with claims that they enjoy high yields and a guaranteed principal.
According to CBIRC these actions have in some causes constituted financial fraud and illegal-fundraising, with the relevant Chinese laws stipulating that insurers, insurance brokers and other members of the insurance sector are prohibited from the sale of non-insurance financial products without the approval of the financial authorities.
CBIRC further points out that sales staff who sell non-insurance financial products must satisfy the corresponding qualifications requirements in advance.
A spokesperson from CBIRC said that Chinese consumers who execute insurance agreements must read their contents carefully, and be sure of the detailed provisions and key information concerning insurance products.
The spokesperson said that where insurance companies or brokerages sell non-insurance financial products they should provide customers with full information disclosures and risk warnings.
Insurance companies and brokerages are also prohibited from selling non-insurance financial products in breach of the wishes of customers via the “packaged sale” of products, and from selling non-insurance financial products that exceed the demand or risk capacity of clients.