In a bid to promote the growth of commercial pensions, China has decided to broaden the scope for insurance companies in developing and offering exclusive commercial pension insurance products.
A circular published by the National Financial Regulatory Administration (NFRA) included 33 significant points which outline specific requirements for insurance companies venturing into this domain. These requirements encompass solvency adequacy ratios and liability reserve coverage ratios, ensuring financial stability.
Commercial pension insurance products are designed to provide private pension annuity options aimed at improving the financial well-being of elderly individuals, with payments beginning at the age of 60.
Additionally, the circular standardises the design of commercial pension insurance products and introduces stringent information disclosure requirements for insurance companies. It establishes standards concerning the accumulation period, insurance liabilities, and cash value, while enforcing uniform filing management for program terms and premium rates.
The circular also provides clarity on the authority of insurers to partner with qualified commercial banks to promote and distribute these commercial pension insurance products.
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