Chinese regulators are intent on ensuring that insurance companies stick to their lane amidst a broader push to contain risk in the financial sector.
The China Banking and Insurance Regulatory Commission (CBIRC) issued the “Liability Insurance Operations Regulatory Measures” (责任保险业务监管办法) on 25 December in order to “further standardise liability insurance operations and protect the legal rights and interests of parties to liability insurance activities.”
CBIRC officials said that a key emphasis of the Measures will be to ensure that insurers in China do not “expand their services scope arbitrarily.”
The Measures stipulate that “the main goal of insurance companies in providing insurance services should be to reduce compensation risk,” which would help to prevent “insurance companies from arbitrarily expanding their services scope, and using insurance services to engage in illegal or non-complaint conduct.”
CBIRC officials said that the rapid growth of liability insurance in recent years had also led to problems including poor understanding of such services amongst the public, “non-standard” market conduct, and lack of standardisation in the form and quality of insurance services.