On 30 July 2008, the CIRC promulgated a circular on banning illegal commercial insurance institutions and illegal commercial insurance activities. The circular is aimed to crack down illegal commercial insurance institutions and illegal insurance activities, as well as illegal insurance intermediaries and illegal insurance intermediary activities. "Illegal commercial insurance institutions" and "illegal insurance intermediaries" are defined in the circular as institutions which are not approved by the regulatory authority of the insurance sector (Insurance Authority).
According to the circular, the following activities will be classified as illegal insurance activities:
- collecting insurance premiums from the public; and
- agreeing to pay insurance benefits without approval by the Insurance Authority.
In addition, the following activities will be classified as illegal insurance intermediary activities:
- directly or indirectly collecting commissions from insurance companies;and
- selling insurance products and engaging in insurance business on behalf of insurance companies without approval by the Insurance Authority.