It's just for "a"Insurance actI'm sorryRevised draftThe draft has not yet officially landed and does not amount to an effective law; it does not constitute a proposal for the purchase of insurance products and does not cover the sale of insurance. Financially focused attention is given to consulting firms, and there are no insurance intermediaries。
Over a number of years, a major revision of the insurance law came for comments. The main lines of this reform are: penetrating regulations, strengthening institutional integrity, improving insurance contracts, increasing penalties for non-compliance and improving exit mechanisms for risk. Many small and medium-sized entrepreneurs are concerned about how the rules will change in the future as a tool for segregation. This paper is divided into three categories of subjects, comparing existing insurance laws with the revised draft, and dismantling opportunities and risks。
I. To insurance companies: high threshold, strong regulation, good or bad
Nice
1. The system identifies asset liability management as a statutory obligation, well-regulated insurance funds, clearer long-term funding space and more development space for a robust front company。
2. Shareholders, managers and regulators pass through regulation and are written into law to clean up surrogate, fraudulent, unconnected transactions and to reduce internal risk disturbances by regulated companies。
3. Improved risk management, early corrective mechanisms, better regulatory toolbox, early detection and disposal of risks and avoidance of concentrated risk outbreaks。
Misuse/pressure
1. The registered capital threshold has been raised from 200 million to 1 billion contributions, and the capital threshold has risen significantly, making it more difficult for small and medium-sized insurance institutions to set up; the original shareholders'sources of funding, comprehensive vetting of qualifications and shrinking of their operating space。
Corporate governance, internal control and solvency require upgrading; accountability for high-level offences is enhanced, payback is refundable and management accountability increases。
3. There has been a significant increase in the level of penalties, as well as a significant increase in the illegal costs of misleading sales, irregularities in terms of terms, defects in the disclosure of information, and a tightening of the product design, promotion and sales process。
4. Product terms and tariffs are more regulated, non-compliant products can be stopped directly and new products declared more restrictively。
In one sentence, the insurance company: the good company is more stable and the weak company accelerates the clean-up; the capital play is restricted and compliance becomes the bottom line of survival。
Clients (especially sme owners, core audiences with a strong financial stake)
Nice
1. Upgrade of consumer protection provisions: legalization of the system of hesitation, further strengthening of obligations in terms of misleading sales, disclosure of information, exoneration clauses, regularization of time limits for settlement of claims, reduction of grievances, verbal refusals, etc。
Insurance company shareholders penetrate regulation to reduce the probability that large shareholders will empty their assets, that related transactions will erode the assets of the insurance institution, and that the overall security of the payment of the policy will be enhanced。
3. Personal data protection is included in the insurance legal framework, and customer insurance information is used more clearly。
- risks
The draft improves the exit rules for the insurance institutions' markets and breaks the implicit “hard pay” expectations. Once risks have arisen from insurance companies, the policy may adopt contract adjustments and loss-sharing mechanisms, which are no longer the model of a complete transfer. Business owners can no longer acquiesce to 100 per cent unconditional preservation of the policy and choose subjects more carefully。
2. If the rules of notification are further refined, the boundaries of the customer's notification obligation are clearer, information on financial and business liabilities are concealed, and it is easier in the future to trigger the rejection and cancellation of the contract。
3. In the future, justice + regulation will be more rigorous in the use of insurance policies for debt-segregation purposes. The policy is not a firewall, and the timing of insurance coverage, the source of funding, and the insurance person's structure will become key elements of the review, which is also a key point in the pre-planning of corporate management。
A sentence is given to the owner: claims protection is stronger, but policy payment is no longer an absolute guarantee; asset segregation by policy must be planned in advance and cannot be remedied ex post。
Insurance practitioners (agents, brokers)
Nice
1. The clearing of non-compliant capital in the industry, the gradual release of poor quality institutions, the improvement of the industry environment for compliance practitioners and the prospect of a long-term restoration of customer confidence in the insurance industry。
2. Disorders such as misleading sales, false propaganda and so forth are subject to the force of the law, which reduces the amount of bad currency to be expelled and increases the value of professional consultants。
Misuse/pressure
1. The principals of the institution are held to account and their accountability increases. Practitioners carry out propaganda, product interpretation and the retention of all traces of information; individuals and institutions face high penalties for misleading sales and exaggerating the effects of policy debt segregation。
Regulation tightens the control of publicity content and does not arbitrarily exaggerate the debt segregation and asset preservation functions of the policy. Many of the words that used to be used in the past industry would touch the legal red line。
3. The industry threshold continues to rise, and the pattern of heavy-handedness and overbroad propaganda is unsustainable, forcing practitioners to switch to a combination of legal, fiscal and regulatory expertise。
A short summary of practitioners: the era of rhetorical marketing has come to a close; there is long-term space for professional advisers who understand the law, understand the boundaries of risk and reveal the limitations。
Iv. 3 practical advice to sme owners from a corporate perspective
1. Distinction between stages: at present, it is a draft opinion, which has not yet been put to a formal vote, so that there is no rush to take out insurance coverage and avoid the risk of a rush structure placing a source of funding and pre-debt。
2. Building the right perception: insurance is one of the risk instruments, not a debt-avoidance panacea. Household segregation gives priority to cutting off public and private accounts, equity, cash flows and insurance as an accompanying tool to be assessed within the overall wind control structure。
3. Ongoing attention to the legislative process: future policy preservation, enterprise insurance, changes in the legal rules of beneficiaries, pre-regulating the existing policy framework, checking sources of funding, insurance time risk points。
This is only the legal system section of the insurance act (draft revised version for comments) and the draft has not yet entered into force, and the final text is based on the version adopted by the national people's congress. This document does not constitute a recommendation for any insurance product, a recommendation for insurance, or a sale of insurance。
