In May, the Financial Regulatory Authority and its dispatched institutions imposed fines totaling 15.768 million yuan on insurance institutions, marking a year-on-year decrease of 55.8%. Property insurance companies were fined 8.547 million yuan, life insurance companies were fined 6.086 million yuan, and insurance intermediary institutions accounted for the remainder. Additionally, three individuals were banned from the insurance industry for periods ranging from four to ten years.
Property Insurance: “Five False” Issues Persist
Property insurance companies accounted for 54.2% of the total fines in May, with 8.547 million yuan in penalties. The key issues leading to these fines were the “five false” problems: false underwriting, false policy cancellation, false premium listing, false expense listing, and false claims settlement. Several institutions, including the Hulun Buir Central Branch of Taishan Property Insurance and the Jiamusi Central Branch of Dubang Property Insurance, were penalized for these issues.
In addition to the “five false” issues, illegal cross-provincial operations of auto insurance business also led to significant penalties. For example, the Inner Mongolia Branch of Hua’an Property & Casualty Insurance was fined 30,000 yuan for illegally underwriting compulsory traffic insurance for out-of-province trucks. Industry insiders suggest that property insurance companies need to strengthen internal compliance management, particularly in areas such as fabricating intermediary business and preparing false reports.
Life Insurance: Sales Misguidance and Data Issues
Life insurance companies accounted for 38.6% of the total penalties, with 6.086 million yuan in fines. Key reasons for penalties included sales misguidance, inaccurate business data, granting benefits to policyholders beyond the insurance contract terms, and underwriting personal insurance for individuals without civil capacity. On May 27, the Henan Branch of Li’an Life Insurance and three related responsible persons were fined 310,000 yuan for inciting insurance agents to engage in activities that violate the duty of good faith.
Misleading sales and deceiving policyholders remain chronic problems in the life insurance industry. Regulatory authorities are maintaining a high-pressure stance, implementing composite disciplinary measures, while insurance institutions need to enhance internal control mechanisms and improve compliance systems. The bancassurance channel has also become a key focus of regulatory penalties, with several branches of Fudeli Life Insurance fined for inaccurate financial records and misleading training content.
Insurance Intermediary Institutions: Multiple Violations
Nine insurance intermediary institutions were punished in May, with total fines amounting to 1.135 million yuan. The maximum fine was 313,000 yuan, imposed on Wenshan Sigong Auto Insurance Sales Co., Ltd. for off-book income and expenditure handling fees, failure to record salesperson information truthfully, and other violations.
Other intermediaries fined include Hunan Zhongyang Insurance Appraisal Co., Ltd., Jinlian’an Insurance Brokerage (Beijing) Co., Ltd., and various branches of Beijing Fengrong Insurance Brokerage Co., Ltd. Reasons for penalties included failure to report changes, appointing unqualified personnel, and providing policyholders with benefits beyond contract terms.
New Regulations to Enhance Penalties
The “Administrative Penalty Measures of the National Financial Supervision and Administration Commission” were released on April 30 and will take effect on July 1. These new regulations are expected to make penalties more standardized and scientific, providing a stronger institutional guarantee for the stable development of the insurance market.
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