Submitted Comments on CBIRC’s Draft “Guidance on Implementing Comprehensive Reformation of Vehicle Insurance”

2020-08-05 | Beijing, Shanghai

The European Chamber welcomes the decision of the China Banking and Insurance Regulatory Commission to publicly call for comments on the Guidance on Implementing Comprehensive Reformation of Vehicle Insurance (Draft for Comments). Upon the circulation of the draft within its relevant working group members, the Insurance working group on 5th August submitted comments for consideration of the CBIRC. 

Regarding article 10, the working group suggests the regulator to disclose the rate tables at each territory in order to prevent information asymmetry and to promote more fair competition in the industry, so that the insurance company's fees and rates are subject to market’s supervision. Regarding Article 14, it was noted that a ceiling on expense rate is necessary, but promoting commission rate into finer tiering is also important. The working group suggests the regulator to support and encourage insurance companies to scientifically refine and differentiate acquisition expense to match the individual exposure’s underwriting risk.