The China Banking and Insurance Regulatory Commission (CBIRC) has launched a new campaign for the protection of the rights and interests of financial consumers.
On 10 October CBIRC issued the “Notice on Undertaking Work for the Rectification of Malfeasance Involving Banking and Insurance Institutions Infringing the Rights and Interests of Consumers” (关于开展银行保险机构侵害消费者权益乱象整治工作的通知).
The Notice calls for financial institutions to engage in self-inspections, with regulators undertaking guidance and sample inspections when appropriate.
For the banking sector, CBIRC said that the focus will be on product design, sales and promotion, product sales, internal management and cooperation with third party organisations, while for the insurance sector the focus will be on products, claims and online insurance operations.
With regard to product sales by banking products, key areas of malfeasance include failure to conduct appropriate testing of products prior to sale, and engaging in risk assessment on behalf of clients or inducing consumers to raise risk categories in order to drive sales of high-risk wealth management products.
Other areas include the sale of products whose risk levels are greater than the acceptable risk threshold for clients, as well as the sale of privately funded products to unqualified investors.
CBIRC has already stepped up its scrutiny of the banking and insurance sectors since the start of 2019, issuing penalties to 1239 institutions and 1664 individuals in the first seven months of the year, for fines worth a total of 594 million yuan.