China Drafts Negative List to Curb Internet Insurance Abuses

Authorities are soliciting industry feedback on measures to further regulate internet insurance operations, proposing a negative list that would prohibit practices such as luring purchases with free policies and silent renewals. A person in charge of a relevant department at an insurer said the company's department received the notice, which mainly targets non-auto insurance business, and the company will soon organize training for relevant staff on its contents. The internet insurance market has grown rapidly in recent years and has become an important channel for insurance sales. Public information shows that complaints containing keywords such as free and insurance number nearly 7,000.

The internet insurance sector has seen practices including pop-up hijacking to divert traffic, low-price free policies used as inducements, imperceptible deductions, altered low-protection products, and layer-by-layer subcontracting of channels, leading to frequent consumer complaints. The document explicitly lists prohibited clauses for internet insurance operators, including no offline scanning of codes to divert traffic without demand and other irregular marketing conduct, no using free policies to induce purchases, irregular policy upgrades, or silent renewals, and no setting obstacles to surrender. In regulating product development and marketing management by operators, the prohibited clauses include no use of unregistered terms and rates, no development of altered products with weakened protection, no disguised adjustment of protection pricing and use of product upgrades to induce sales, no entrusting unqualified entities with insurance marketing, and no allowing third parties to overstep their authority in core sales links or subcontract marketing business layer by layer.