The China Insurance Regulatory Commission ("CIRC") has tightened rules on insurer licensing and the telesale of life insurance products as follows:


Under the new regulations, licences will be issued depending on the insurer’s scope of business and ability to bear risk. The rules classify insurance businesses into ‘basic’ or ‘extended’ categories. New insurers can only apply to carry out ‘basic business’ and will be barred from ‘extended business’ until they qualify for all basic businesses.

Additionally, insurers who wish to conduct basic business are required to meet certain registered capital requirements, and insurers applying to handle extended

business need to have strong financials and sound risk control and compliance management.

The products covered by the above categories include the following:

Basic (non-life insurance): motor insurance, commercial or household property insurance, engineering insurance, liability insurance, ship and cargo insurance, health and accident insurance.

Basic (life insurance): ordinary life insurance such as term, endowment and whole life; health insurance; accident insurance; participating life insurance and universal life insurance.

Extended (non-life insurance): agriculture insurance, credit guarantee insurance, special risk insurance and investment risk insurance.

Extended (life insurance): includes unit-linked insurance and variable annuity insurance.


More than two-thirds of life insurance in China is sold over the phone. This process has created problems for consumers. CIRC received 617 consumer complaints about insurance telesales in 2012, up from only 16 in 2011, with more than half of the complaints relating to life insurance. Complaints include repeated calls, fraudulent information provided by salespeople and the disclosure of personal information.

Under the new regulations, insurance salespeople are prohibited from making cold calls between 9:00p.m. and 9:00a.m. Life insurance companies will be required to maintain a list of people who do not wish to be called, and any client who requests not to be called again should be added to the list for at least six months.