China Insurance Association Q2 Assumed Rate Rebounds to 1.94%, Dividend Demo Rate to Drop to 3.5% from July

The China Insurance Association recently held the Q2 2026 meeting of its Life Insurance Interest Rate Research Expert Advisory Committee. The meeting proposed that the current assumed rate for traditional life insurance products is 1.94%, up 1 basis point from the previous quarter. This marks the second consecutive quarterly rebound after four quarters of decline. Since the establishment of the dynamic adjustment mechanism in 2025, the seven published assumed rates have been 2.34%, 2.13%, 1.99%, 1.90%, 1.89%, 1.93%, and 1.94%. The current cap on the assumed rate for traditional products is 2.0%, which is 6 basis points above the research value and far below the threshold for adjustment, which requires the cap to exceed the research value by 25 basis points or more for two consecutive quarters. The cap on the demonstration rate for participating (dividend) insurance will be lowered from 3.9% to 3.5% effective July 1, 2026. Insurance companies must complete change filings or stop selling products with demonstration rates above 3.5% by June 30. The reduction in the demonstration rate does not directly affect policyholders' actual returns, which depend on the company's annual operating results. Some insurers have already launched participating products with an assumed rate of 1.25%, 50 basis points lower than the mainstream 1.75% assumed rate for such products.