The China Insurance Regulatory Commission has published Guidance on combatting misleading and deceptive conduct in the insurance sector.

On 14 December 2017 the China Insurance Regulatory Commission (CIRC) published Guidance on combatting misleading and deceptive conduct in the insurance sector (Guidance), for the first time clearly defining ‘misleading and deceptive’ (M&D) conduct in the insurance sector as being ‘an attempt by any person to obtain unlawful benefit via either (i) the use of contracts of insurance; or (ii) masquerading as an insurer’.

The key points contained in the Guidance are:

  1. The formulation and implementation of systems by insurers to manage M&D risk, involving the clear delineation of the roles, responsibilities and reporting lines applicable to each of the board of directors, board sub-committees, supervisory board, senior management and company departments, in managing M&D risk.
  2. The nomination of M&D risk management personnel, where those personnel are senior executives who themselves are able to take on M&D risk management responsibilities, and where the nomination and appointment of such personnel is notified in writing to CIRC.
  3. The establishment by an insurer’s headquarters of M&D risk management departments or divisions, and the implementation by these departments or divisions of concrete M&D risk management measures.