On 7 May 2018, the China Banking & Insurance Regulatory Commission (C-BIRC) issued its Guidance in Respect of the Development of Personal Income Tax-Deferred Pension (Insurance) Products (the Guidance).

The Guidance’s key requirements are:

  1. The development of personal income tax-deferred pension (insurance) products (Pension Products) should adhere to the principles of ‘steady & sure returns; long-term lock-in; guaranteed life-long drawings; and actuarial balance & equivalence’.
  2. Pension Products may offer insured coverage (benefits) in three main main areas: (i) annuities; (ii) total disability; and (iii) death.
  3. In accordance with defined contribution benefit pension plan principles, benefits payable under the Pension Products may be either (i) fixed; or (ii) guaranteed minimum; or (iii) floating.
  4. Insureds under the Pension Products (Insureds) shall have an absolute right to choose and/or change products. Prior to drawing benefits under an annuity Pension Product, an Insured may change his/her product, including changing products within the same insurance company, or changing products by transferring the policy to another insurance company. Further, prior to drawing benefits under an annuity Pension Product, an Insured may apply to change the method of drawing under that annuity Pension Product.
  5. Those insurance companies (Insurers) wishing to participate in Pension Products trials must ensure compliance with these Guidelines, and with all other insurance regulations relevant to insurance products generally. In developing and formulating Pension Products, Insurers may develop products with increasing and expanding benefits, provided such Pension Product benefits are increased and expanded in the interests of and for the benefit of the insured, and in accordance with these Guidelines. All draft and proposed Pension Plan policies must meet all requirements, and must be formally approved before release into the general market.