The Measures for the Regulation of Internet Insurance Business ('Measures') were published by the China Banking and Insurance Regulatory Commission ('CBIRC') on 7th December, 2020, and takes effect on 1st February, 2021. Key elements of the Measures are:
1. The Measures define 'Internet Insurance Business' as that insurance business and operations, including the execution of insurance contracts ('Internet Policies') and subsequent provision of insurance services, which is undertaken and provided by insurance institutions via, the Internet (with however non-Internet exemption allowed on a case by case basis for underwriting and claims management). Further, in order to qualify as Internet Insurance Business, the sales and marketing materials relating to Internet Policies shall be independently and directly accessible by consumers via an insurance institution's self-owned and self-managed internet insurance platform ('Self-Owned Platform'), and the consumer shall be able to purchase such Internet Policy online and within the Self-Owned Platform, and without the need for any other external support or assistance.
2. The Measures stipulate that Internet Insurance Business, as defined in the Measures, shall only be carried on by CBIRC-regulated insurance institutions ('CBIRC Insurance Entity'), and that all other entities and persons ('non-CBIRC Entity') are strictly prohibited from conducting Internet Insurance Business. This prohibition on non-CBIRC Entities includes, without limitation, a prohibition against the sales and marketing of Internet Policies, with examples of such sales and marketing prohibition including a prohibition against:
- providing any form of consulting service in respect of an Internet Policy;
- providing Internet Policy comparison data (especially pricing and coverage comparison):
- assisting design or complete Internet Policy application plans for prospective insureds;
- completing and lodging Internet Policy applications on behalf of, or by way of proxy (authorised or otherwise) for prospective insureds; and
- collecting Internet Policy premiums by way of proxy.
3. The Measures' definition of Self-Owned Platform (i.e. self-owned by a CBIRC Insurance Entity) means that a CBIRC Insurance Entity looking to undertake Internet Insurance Business cannot outsource any aspect of the Internet Insurance Business cycle to any other non-CBIRC Entity.
4. The Measures contemplate that, subject to subsequent CBIRC notices, that a CBIRC Insurance Entity will have ability to directly market, distribute and service Internet Policies (both P&C and Life) on a national basis throughout China, without any other geographic restriction (including that earlier requirement for provincial branch office establishment).
5. The Measures mandate that all CBIRC-regulated insurance entities meet (via 'rectification') extensive and detailed Internet insurance operational requirements as otherwise set out in the Measures, in the following areas of operation and within the following timeframes (dated from 1st February 2021):
- systems controls and management-- (3 months);
- sales and marketing operations -- (3 months);
- information disclosure-- (3 months);
- other business and operation issues-- (6 months); and
- network security, customer data privacy and protection -- (12 months).