The Insurance and Reinsurance Law Review: China
In 2020, the Chinese insurance industry underwent several developments and changes. First, the China Banking and Insurance Regulatory Commission (CBIRC) released new administrative measures on regulating several types of insurance, including credit, surety, liability and health insurance, among others. Second, the CBIRC further strengthened and improved its supervision of internet insurance. In accordance with these new internet measures, insurance companies are now required to develop retrospective management so that their internet sales activities can be traced and examined. Third, the CBIRC has harmonised the rules regulating insurance agencies. Fourth, in light of the impact of the covid-19 outbreak, business interruption insurance has received increased attention in China and has been the subject of disputes in insurance claims relating to the epidemic or epidemic control measures.
Based on data released by the CBIRC on its official website, on 28 January 2021, aggregate original insurance premium income reached 4.5 trillion yuan, reflecting a 6.12 per cent year-on-year increase; insurance indemnities and other expenditures reached 1.3 trillion yuan, a 7.83 per cent increase; the total assets of the insurance industry reached 23.2 trillion yuan, a 13.29 per cent increase; the net assets of the insurance industry reached 2.7 trillion yuan, a 10.95 per cent increase; and the overall amount of insurance funds reached 21.6 trillion yuan, a 17.02 per cent increase.
In 2020, several new regulations were issued by the CBIRC and other government authorities to press ahead with the reform and development of the insurance industry.
i Rules on Credit Insurance and Surety Business
On 19 May 2020, the CBIRC issued the Rules on Credit Insurance and Surety Business (the Rules). The Rules further clarify the operational and financing requirements in the credit insurance business, afford greater protections for the rights and interests of insurance consumers, direct established insurance companies to serve the real economy with measures encouraging them to increase their financial support for small and micro enterprises through flexible underwriting limits and expand the business types that the insurance services will support, among other measures.
ii Notice on Regulating Retrospective Management of Internet Insurance Sales Activities
The CBIRC issued the Notice on Regulating Retrospective Management of Internet Insurance Sales Activities (the Internet Notice), consisting of 26 articles, on 30 June 2020. The Internet Notice regulates internet insurance sales activities and protects the legitimate rights and interests of consumers purchasing internet insurance products. The Notice makes clear that the retrospective management of internet insurance sales activities requires insurance companies to store and save insurance product sales activities on their self-operated internet platforms by managing their sales pages and recording their sales processes, such that sales activities can be traced and examined. The Internet Notice contributes to preventing operational risks, maintenance of market order and safeguarding consumers' basic rights to make free, fair and informed choices.
iii Notice on Standardising Health Management Services of Insurance Companies
On 9 September 2020, the CBIRC released the Notice on Standardising Health Management Services of Insurance Companies (the Health Notice). In the Health Notice, the CBIRC increases regulatory scrutiny over the conduct and service delivery of insurance companies providing health management insurance products, in a bid to improve the quality and level of related services. The Health Notice also specifies the compliance requirements and internal accountability mechanisms required for insurance companies to carry out health management services.
iv Rules on Insurance Agents
The CBIRC released a new regulation regarding insurance agents on 23 November 2020. The Rules on Insurance Agents (the Rules on Agents) took effect on 1 January 2021, whereupon professional insurance and sideline insurance agencies became subject to more harmonised supervision requirements. In addition, the concept of 'individual insurance agent' was advanced for the first time. To promote the healthy and steady development of the insurance agency market, the CBIRC is expected to issue relevant supporting policies that build on the Rules on Agents as soon as possible.
v Administrative Measures on Internet Insurance
After the latest version of the Administrative Measures on Internet Insurance (draft for comments) was issued by CBIRC in 2019, the final version, the Administrative Measures on Internet Insurance (the Administrative Measures), was issued on 14 December 2020. The Administrative Measures clarify the essence of internet insurance business, stipulate the operational requirements for internet insurance business, prohibit non-licensed institutions from operating in the internet insurance space, standardise internet insurance marketing and also describe the after-sales services involved with internet insurance.
Insurance and reinsurance law
i Sources of law
As China is a civil law country, the sources of law are found in statutory codes. The sources of insurance law in China mainly consist of:
- the Insurance Law;
- judicial explanations issued by the Supreme People's Court;
- other relevant laws promulgated by the National People's Congress; and
- regulations and guidelines issued by the CBIRC and other relevant government institutions.
ii Making the contract
The Insurance Law (the Law) does not define a reinsurance contract. In practice, a reinsurance contract is deemed to be a special type of insurance contract concluded between the ceding insurer and the reinsurer.
Pursuant to the Law, an insurance contract is defined as an agreement in which an applicant and an insurer set out their respective rights and obligations under the insurance policy. The term 'applicant' refers to the party that concludes the insurance contract with the insurer and who must pay the premium in accordance with the contract. The term 'insurer' refers to the insurance company that concludes the insurance contract with the applicant and that is liable for paying insurance indemnities in accordance with the contract.
The Law insurance divides contracts into two classes, namely personal insurance contracts and property insurance contracts. A personal insurance applicant has an insurable interest in the insured at the time when the insurance contract is formed, while an insured in property insurance has an insurable interest in the subject insured at the time when an incident covered by the insurance occurs.
An insurance contract is formed when an insurance applicant applies for insurance and the insurer accepts the application. The insurer then issues to the insurance applicant an insurance policy or any other insurance certificate in a timely manner.
Pursuant to Article 18 of the Law, an insurance contract shall contain the following:
- the name and address of the insurer;
- the names and addresses of the insurance applicant and the insured, and the name and address of the beneficiary when applying for personal insurance;
- the subject insured;
- insurance liability and liability exemptions;
- the period of insurance and the commencement date of insurance liability;
- the amount insured;
- the premium and payment method;
- the method for paying indemnity or insurance benefits;
- liabilities for breaches of contract and resolution of disputes; and
- the day, month and year of the conclusion of the contract.
The insurance applicant and the insurer may agree upon other particulars related to insurance in the insurance contract.
In concluding an insurance contract, the applicant has a duty of honest disclosure when the insurer enquires about the subject insured or relevant circumstances concerning the insured. The insurer shall have the right to rescind the insurance contract if the applicant intentionally or with gross negligence fails to perform his or her duty of honest disclosure, to the extent that the failure materially affects the insurer's decision on whether to provide the insurance or whether to increase the premium rate. Invoking the right of rescission reverses any insurance liability that was assumed for insured incidents that occurred prior to the rescission of the contract, entitling the insurer to those benefits that had already been paid out. However, there is one minor distinction to be made between failing to disclose material facts as a result of gross negligence versus intentionally failing to disclose. If an applicant fails in the duty to disclose out of gross negligence, and this affects the insurer's pricing or provision of the policy, the insurer shall, with respect to the incidents occurring prior to the rescission of the contract, bear no insurance liability, but shall return the paid premiums. When an applicant intentionally fails to disclose a fact, however, the applicant is not entitled to a refund of the policy premium in the event of its rescission. Note, however, that if an insurer enters into an insurance contract with an applicant knowing that the applicant has failed to disclose a material fact, the insurer is not entitled to rescind the contract, and if an insured incident occurs, the insurer shall bear the insurance liability.
For those clauses in the insurance contract that exempt the insurer from liability, the insurer must give the applicant sufficient warning about those clauses in the insurance application form, the insurance policy or any other insurance certificate, and expressly explain the contents of those clauses to the applicant in writing or orally; if the insurer fails to give a warning or explicit explanation thereof, those exemption clauses shall not be effective. Notably, the PRC Civil Code, which came into effect on 1 January 2021, brings about some changes regarding the validity of standard clauses. Article 496 of the PRC Civil Code provides that apart from standard terms that exempt or reduce the insurer's liability, other standard terms that the insurer provided to the applicant but failed to conclude in line with its duty of utmost good faith and that carry a significant interest for the other party will also not be effective.
iii Interpreting the contract
The provisions of the insurance contract become ambiguous when the insurer and the insurance applicant, the insured or the beneficiary, have different interpretations of the policy. If a provision is found to be ambiguous, it should be interpreted in accordance with the following interpretative methods.
Semantic interpretation means interpreting the policy with common knowledge in accordance with the common sense of ordinary people. The interpretation cannot deviate from the wording of the policies and other methods of interpretation can be applied only when the outcome of a semantic interpretation is still unclear. The semantic interpretation method is also the fundamental method.
Systemic interpretation refers to interpreting the provisions based on the entire contents of the contract and taking into consideration the connection of each provision with the other provisions in the contract.
Contract aim-based interpretation
Contract aim-based interpretation means interpreting the policy in accordance with the real intention of the parties to the insurance contract.
Good faith interpretation
Good faith interpretation is based on the utmost good faith principle, whereby the insurance contract is interpreted by applying the waiver and estoppel rules. The good faith principle is an essential principle in the civil law system and is similar to the utmost good faith doctrine in the common law system.
Under a special interpretation, the contents of the schedule outweigh the policy clauses; the handwritten clauses outweigh the printed clauses; and a special exception is that the contents of the application form outweigh the insurance policy and schedule even if the application form is formed earlier than the latter two parts of the insurance contract.
Where the insurer and applicant, insured or beneficiary have a dispute over a clause in an insurance contract concluded by using the standard clauses provided by the insurer, the clause shall be interpreted as commonly understood. If there are two or more possible interpretations of the clause, a court or arbitration institution shall interpret the clause in favour of the insured and beneficiary.
iv Insurance intermediaries
Insurance intermediaries include insurance brokerage companies, insurance agencies and insurance assessment institutions. China has adopted the Regulatory Provisions on Insurance Brokerages, the Rules on Agents and the Regulatory Provisions on Insurance Adjusters to regulate insurance brokerage companies, insurance agencies and insurance adjusters.
Insurance brokerage companies and insurance agencies have to be in the form of either a limited liability company or a joint-stock limited company. Brokers provide intermediary services to insurance applicants and insurance companies to execute insurance contracts based on the interests of insurance applicants, while insurance agencies are authorised by insurance companies to handle insurance business on their behalf. The two regulations on insurance brokerage companies and insurance agencies respectively provide the requirements on market access, operation rules, market exit, supervision and inspection, and legal liabilities. Further details are also provided regarding the business establishment, qualifications of personnel, scope of business and prohibited acts.
For instance, an insurance brokerage company must meet the following conditions to be established:
- Shareholders, promoters and sponsors must have a good reputation and must have no record of major irregularities in the immediately preceding five years.
- The registered capital must reach a minimum requirement. The minimum registered capital of an insurance brokerage company must be 50 million yuan if it operates beyond a province, autonomous region, centrally administered municipality or a municipality with unilateral planning at the place of its industry and commerce registration. The minimum registered capital of an insurance brokerage company must be 10 million yuan if it operates within a province, autonomous region, centrally administered municipality or a municipality with unilateral planning at the place of its industry and commerce registration. The registered capital of an insurance brokerage company must be paid in cash.
- The articles of association must comply with the relevant provisions.
- The chair of the board of directors, the executive director and senior management must comply with the qualifications specified in the Regulatory Provisions mentioned above.
- It must have a sound organisational structure and management system.
- It must have a fixed domicile commensurate with the scale of its business.
- It must have business, financial and other computer hardware and software facilities commensurate with its business.
- It must meet other conditions specified in laws, administrative regulations and provisions of the CBIRC.
Similar conditions apply for a professional insurance agency, with only a few differences following the entry into effect of the CBIRC's Rules on Agents on 1 January 2021. This includes registered capital, whereby the registered capital of a professional insurance agency must be 20 million yuan, although if it only operates in a single province or in another provincial region, it must only prove capital in the amount of 10 million yuan.
An insurance brokerage company may engage in the following business:
- drafting insurance application proposals, selecting insurance companies and handling the insurance application formalities for insurance applicants;
- assisting the insured or beneficiaries in claiming compensation;
- reinsurance brokerage business;
- providing clients with disaster, loss prevention, risk assessment or management consulting services; and
- other business approved by the CBIRC.
To engage in insurance brokerage business, an insurance brokerage must enter into a written brokerage contract with a client agreeing to the rights and obligations of both parties and other relevant matters. A brokerage contract may not violate any laws or administrative regulations or the provisions issued by the CBIRC.
In conducting business, an insurance brokerage company must prepare a standard client notification letter. This letter must, at minimum, include basic information about the company, such as its name, business premises, scope of business and any contact methods. If there is any affiliation between the company or its director or senior executive and an insurance company or insurance intermediary institution related to its brokerage business, this must be explained in the client notification letter.
An insurance brokerage practitioner must present the client notification and, at the request of the client, explain the manner of collection and the rate of commissions. The practitioner must also inform the clients of the insurer of an insurance product, make a full and fair analysis of any similar products recommended and clearly alert an insurance applicant to the clauses in the insurance contract regarding, inter alia, liability exemptions or exceptions, surrender, deduction of other expenses, cash value and the cooling-off period.
A professional insurance agency may engage in the following insurance agency business:
- selling insurance products as an agent;
- collecting insurance premiums as an agent;
- conducting damage surveys and claim settlements for the relevant insurance business as an agent; and
- other business approved by the CBIRC.
To engage in insurance agency business, a professional insurance agency must enter into a written agency contract with an insurance company, agreeing on the rights and obligations of both parties and other relevant matters. An agency contract may not violate any laws or administrative regulations or the provisions issued by the CBIRC.
A professional insurance agency must prepare a standard client notification letter and present it to the client while conducting business. The client notification letter must, at a minimum, include basic information about the full-time insurance agency and the represented insurance company, such as their names, business premises, scope of business and contact methods. If there is any affiliation between the professional insurance agency or its director or senior executive and the represented insurance company or the relevant insurance intermediary company, this must be explained in the client notification letter. A professional insurance agency must also clearly alert an insurance applicant of the clauses in the insurance contract regarding, inter alia, liability exemptions or exceptions, surrender, deduction of other expenses, cash value and the cooling-off period.
Under the Insurance Law, the applicant, insured or beneficiary shall, in a timely manner, notify the insurer after becoming aware of the occurrence of an incident covered by the insurance. Where an applicant, insured or beneficiary fails to notify the insurer in a timely manner either intentionally or out of gross negligence, making it difficult to ascertain the nature, cause and extent of the loss of the incident covered by the insurance, the insurer will not be liable for indemnification or payment of the insurance benefits for the indeterminable part, unless the insurer has known or should have known about the incident in a timely manner through other channels. An applicant also has a duty to cooperate with the insurer that is defending a claim on its behalf. The applicant must keep the insurer informed of all major case developments, respond to the insurer's reasonable enquiries and notify the insurer.
After receiving an insured's or beneficiary's claim for indemnity payment, the insurer must assess the claim in a timely manner. If the circumstances are complex, the insurer must complete the assessment within 30 days, unless otherwise agreed upon in the insurance contract. The insurer must notify the insured or beneficiary of the assessment result. For a claim that falls within the insurance coverage, the insurer must perform the obligation of paying the indemnity within 10 days of reaching an agreement on the payment of indemnity with the insured or beneficiary. If the insurance contract provides otherwise for the time limit for indemnity payment, the insurer must perform the obligation of paying the indemnity as agreed upon therein. If the insurer fails to perform the obligation as prescribed, it shall, in addition to paying the insurance indemnity, pay compensation for the insured's or beneficiary's loss suffered.
In cases where an insurer cannot determine the amount of indemnity to be paid within 60 days of receiving a claim for indemnity and the relevant certificates and materials, it must first pay the amount that can be determined according to the current certificates or materials, and after it finally determines the amount of indemnity to be paid, it shall pay the difference.
i Jurisdiction, choice of law and arbitration clauses
China's court hierarchy consists of four levels. The primary courts, intermediate courts, high courts and Supreme Court all have jurisdiction as courts of first instance over civil cases, including insurance litigation, in accordance with the amount of a dispute and the influence of the case.
Generally speaking, the primary courts act as the first instance courts in most insurance cases. On 30 April 2015, the Supreme People's Court issued the Notice of the Supreme People's Court on Adjusting the Standards for the Jurisdiction of the Higher People's Courts and Intermediate People's Courts over Civil and Commercial Cases of the First Instance, and this can be referred to for the hierarchical jurisdiction of insurance disputes. Note also that on 30 April 2019, the Supreme People's Court further issued the Notice of the Supreme People's Court on Adjustments to the Criteria for First-Instance Civil Cases under the Jurisdiction of the Higher People's Courts and Intermediate People's Courts. This Notice sets the minimum amount at issue for trial before a high court to 5 billion yuan. First-instance civil cases with an amount at issue below 5 billion yuan will only be heard by a high court when the matter carries significant influence in the court's jurisdiction.
In terms of territorial jurisdiction, a lawsuit brought on an insurance contract dispute will usually be under the jurisdiction of the court where the domicile of the defendant or the insured object is located. Further, pursuant to Article 21 of the Interpretation of the Supreme People's Court on the Application of the Civil Procedure Law, which was issued on 30 January 2015, for an action instituted for a dispute arising from a property insurance contract, if the subject matter insured is a transport vehicle or goods that were in transit, the case may be under the jurisdiction of the people's court at the place where the transport vehicle is registered, the place of its destination or the place where the insurance accident occurs. A dispute involving a personal insurance contract may be under the jurisdiction of the people's court of the place of the domicile of the insured.
For litigation involving marine insurance, the court of first instance is the professional marine court and the Marine Special Procedure Law is applicable in proceedings of this kind.
Choice of law
As a common rule, the parties to a contract can choose the governing law in a contract. However, pursuant to Article 8 of General Principles of the Civil Law, Chinese law shall apply to civil activities within China, except as otherwise stipulated by law. According to Article 3 of the Insurance Law, this law shall also govern insurance activities conducted within the territory of China.
For an insurance contract concluded within the territory of mainland China, and where both the insurance applicant and the insurer are Chinese entities or Chinese citizens, Chinese laws will usually be applied compulsorily.
More and more insurance companies are choosing arbitration as their dispute resolution method and the most popular arbitration institution in China is the China International Economic and Trade Arbitration Commission.
However, in the insurance contracts of some foreign-invested insurance companies, a dispute resolution clause gives the parties the right to select the method of dispute resolution, either by arbitration or litigation.
Article 7 of the Interpretation of the Supreme People's Court on Certain Issues Concerning the Application of the Arbitration Law states that an arbitration agreement will be invalid if the parties thereto agree that disputes may be resolved either through submission to an arbitration institution for arbitration or by filing an action with a people's court, unless one of the parties applies to an arbitration institution for arbitration and the other party fails to raise an objection within the time limit specified in Article 20, Paragraph 2 of the Arbitration Law.
Consequently, a dispute resolution clause will usually be deemed invalid if it stipulates litigation and arbitration simultaneously. In that case, if either the insured or the insurer submits a dispute in connection with an insurance policy for arbitration, the other party may argue for the invalidity of the clause and refuse arbitration, which means that the dispute will ultimately be resolved by litigation.
Pursuant to Article 26 of the Insurance Law, the statute of limitations for an insured or beneficiary to claim the insurance indemnity against the insurer in any insurance other than life insurance is two years, counted from the day when the insured or beneficiary knew or should have known of the occurrence of the insured accident. However, Article 188 of the PRC Civil Code now provides that applicants have the right to apply for protection of their civil rights for up to three years. Confronted by these two limitation periods, courts will usually apply the three-year period in cases concerning claims for insurance indemnity.
The statute of limitations for an insured or beneficiary in life insurance to claim indemnity against the insurer is five years, counted from the day when the insured or beneficiary knew or should have known of the occurrence of the insured accident.
The litigation procedure for insurance disputes is no different from that of other kinds of civil disputes and the Civil Procedure Law and Interpretation of the Supreme People's Court on the Application of the Civil Procedure Law will be applied. The court must complete trials of first instance cases within six months. It must complete after-trial appeals against judgments within three months of the appeal being docketed, but for appeals against rulings, the court shall issue a final ruling within 30 days of the appeal being docketed.
If any party is unsatisfied with the judgment or verdict of the first instance court, the party can appeal to the appellate court at the higher level. The judgment or verdict of the appellate court is binding. The remedy for a binding judgment and verdict is legal review, but this procedure is rarely initiated.
During the civil procedure, each party submits evidence to prove the facts upon which its own claims are based or upon which its refutation of the counterparty's claims is based. However, in insurance disputes, the insurer bears the burden of proof under several conditions based on the Interpretations of the Supreme People's Court on Several Issues Concerning the Application of the Insurance Law (II). For instance, if the parties concerned have any dispute over the scope and content of the inquiry at the time of concluding the insurance contracts, the insurer then bears the burden of proof.
There is no difference between the arbitration procedure of an insurance dispute and that of other kinds of commercial disputes. The parties shall refer to the arbitration institution's arbitration rules and evidence guidelines in an arbitration procedure. The costs for an arbitration procedure are decided by the arbitration rules of each arbitration institution.
On 18 December 2012, the former CIRC and the Supreme People's Court jointly issued the Notice of the Supreme People's Court and the China Insurance Regulatory Commission on Carrying out Pilot Work of Establishing the Mechanism for Linking Insurance Dispute Litigation with Mediation in Some Regions of China to establish a mediation system for insurance litigation in some cities. The local courts and insurance associations oversee this system.
Pursuant to the Notice, the courts in the pilot regions can, in accordance with the spirit of the Overall Plan of the Supreme People's Court on Expanding the Pilot Reform of the Mechanism for Settling Disputes by the Linkup of Litigation and Non-Litigation,2 establish registers of mediation organisations and mediators that are specially invited. Where conditions permit, the courts can also provide mediation organisations and invited mediators with mediation rooms that are specifically provided to carry out the work required for settling insurance disputes.
The courts in pilot regions must, under the precondition of respecting the parties' will and in accordance with the relevant provisions of the Several Opinions of the Supreme People's Court on Establishing a Sound Mechanism for Settling Disputes by the Linkup of Litigation and Non-Litigation,3 guide parties in effectively settling disputes with low costs through the mechanism for linking insurance dispute litigation with mediation by means of appointed mediation before a case is docketed and by means of authorised mediation after a case is docketed.
In 2016, the Supreme People's Court and the former China Insurance Regulatory Commission jointly issued the Opinions on Comprehensively Advancing the Building of the Mechanism Linking Litigation with Mediation for Insurance Disputes. With the exception of regions carrying out the pilot programme at the earlier stage, the Opinions will actively expand the scope of the regions carrying out the pilot programme to include all municipalities directly under the central government's control and all provincial capitals (capitals of autonomous regions).
After receiving the bill of complaint and before registering a case, a people's court shall guide the parties to resolve insurance disputes via mediation. If the parties agree to this, they must complete relevant mediation forms or sign a letter of consent; if the parties do not agree, the people's court will register the case. After the case is registered, the people's court can still appoint mediation organisations to mediate the dispute with the consent of the parties based on the development of the case. The mediation organisations must finish mediating the dispute within 20 working days of being assigned the case. The mediation period can be extended by seven working days in special circumstances, with the consent of the parties. The mediation organisations can consult with the people's court when dealing with complicated cases.
If a contract is civil in nature, the mediation agreement concluded by the parties to insurance disputes will take place under the mediation of a mediation organisation or mediators. With the signatures and seals of the organisation or mediators, the parties may apply to the court with jurisdiction to confirm the validity of the mediation agreement. A mediation agreement that is confirmed to be valid by the court will have enforceability.
Year in review
On 25 December 2020, the CBIRC issued the Rules on Liability Insurance Business (the Rules), which reflect CBIRC's latest perspectives and the accompanying supervisory trends pertaining to liability insurance. The Rules focus on the following issues:
- Clarification of the scope of underwriting within liability insurance: the scope of liability insurance coverage should be strictly limited to cover the insured's liability for the damage to the third party caused by the insured in accordance with the legal provisions, and it should not cover the risks or losses arising from such causes as intentional acts, fines, performance credit risks, fixed losses and speculative risks.
- Regulation of market operation: in view of irregular competitive behaviour in the current liability insurance market, certain practices are prohibited, such as not using the approved or filed terms and rates, misleading sales, unfair competition and illegal commitments, among others. In addition, it is not allowed to underwrite de facto credit risks in financing activities by underwriting the liabilities of the institutions that provide the applicable credit guarantee.
- Standardisation of insurance services: it is clear that insurance companies should follow the principles of rationality and necessity to provide insurance services, with the main purpose of reducing the risk of compensation, and should not arbitrarily expand the scope and content of services. Insurance companies are required to formulate insurance service-related systems and conduct accounting treatment in accordance with applicable accounting standards to ensure the authenticity and accuracy of data.
- Regulation of insurance practitioners' internal control management mechanisms: this includes further strengthening the requirements for business and risk management, among other controls.
The promulgation of the Rules is an important measure for the CBIRC to better regulate the business activities associated with liability insurance and promote the sustained and healthy development of liability insurance business. For its next step, the CBIRC is expected to monitor closely the implementation of the Rules, strengthen supervision and guide the insurance industry to better serve overall economic and social development.
Outlook and conclusions
The deputy chairman of CBIRC delivered a speech on 16 December 2020, in which he stated that the CBIRC's next step will be to adopt several measures to accelerate the development of commercial endowment insurance, including accelerating the development of professional market entrants; supporting innovation for endowment insurance products; and bolstering the establishment of high-talent teams and enhancing practitioners' professional ability. It is confidently expected therefore that this will improve the endowment insurance market in China in the foreseeable future.
We believe that in the year 2021, with the effective enforcement of relevant rules and regulations, the Chinese insurance industry will be presented with great opportunities for development and potentially a healthier and more mature market environment.