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Rural life insurance rules to be tightened

(China Daily)
Updated: 2006-09-07 13:41

China's insurance watchdog is preparing to release new rules to regulate and promote the development of life insurance in rural areas.

"The rules will probably be made public at the end of this month or early October," said Gong Yisheng, director of the system department of the China Insurance Regulatory Commission (CIRC).

Gong disclosed that the threshold for insurers' entry into rural areas will be even higher than for cities, due to the fragility of the rural market.

For instance, the insurer should have outlets in local markets to ensure service for rural residents. And they will not be allowed to flee the rural market at will.

"All these measures aim to maintain a good environment for insurance development in rural areas," Gong added.

With the 'word of mouth' phenomenon particularly strong in rural areas, misleading sales or unreasonable refusal of claims will result in mass reimbursement demands, thus damaging the local insurance market, he explained.

...

The full text is available in the September Issue ofChina Insurance