The China Banking and Insurance Regulatory Commission (CBIRC) is stepping up its scrutiny of domestic insurers with hefty penalties dispensed over the past two months.
CBIRC issued 34.54 million yuan (approx. USD$5.06 million) in fines to insurance entities in the months of July and August according to a report from Securities Daily.
Property insurance companies incurred the heaviest fines at 21.9 million yuan, accounting for 63% of the total.
Insurance intermediaries incurred 7.42 million yuan in penalties, accounting for 21%, while life insurers were hit with 4.88 million yuan in fines, for a 16% share.
In the month of August alone Chinese insurance entities saw an approximate 10% increase in the value of fines incurred, with life insurers seeing a 1.4-fold rise, while five organisations received orders from CBIRC to suspend operations.
Four insurance companies received fines of over one million yuan in August, with the Sichuan province branch of China Taiping (太平财险) incurring the largest penalty of 1.35 million yuan for falsification of reports and documents during the period from 2016 – 2017, as well as provision of additional benefits to policyholders outside those stipulated by insurance contracts.
Chief reasons behind the fines incurred over the past two months include data falsification, provision of additional benefits outside insurance contracts to policy holders; establishment of branches without approval, failure to file reports in compliance with provisions after change of operating locations; interim executives undertaking operations in excess of stipulated timeframes and misleading sales.
