China’s banking and insurance regulator, the China Banking and Insurance Regulatory Commission, has issued a notice aimed at promoting the development of commercial insurance annuities. The notice is intended to encourage insurance companies to offer a range of pension protection and long-term financial planning services to customers. Commercial insurance annuities are products developed by commercial insurance companies that manage retirement risks and accumulate long-term funds steadily. These products include annuity insurance and endowment insurance designed with a term of five years or more, accumulation periods or annuity periods that conform to the characteristics of pension protection, commercial pension insurance, and other products recognized by the regulator.
The notice also encourages the development of new and exclusive products that meet the personal pension system, and supports insurance companies to explore and develop other annuity insurance and endowment insurance products with strong protection functions, controllable operating costs, and income levels that match customer risk preferences. On the investment side, the notice requires insurance companies to adhere to long-term, value, and stable investment, support the development of the capital market, and increase investment in industries related to the silver-haired economy.
The notice also proposes to further expand the pilot program for commercial pension insurance. According to the principle of “one mature company, one pilot”, it supports more qualified pension insurance companies to participate in commercial pension insurance business. Based on the summary of the pilot experience, the pilot period will be extended, and the pilot area will be expanded. Pension insurance companies should focus on customer pension needs, enrich product supply, improve business processes, enhance customer consumption experience, strengthen risk management, and improve relevant regulatory rules for commercial pension insurance business.
Commercial pension insurance is popular in banks and Alipay channels, according to an employee of a pension company. He said that commercial pension insurance is more flexible than personal pension products, without the annual limit of RMB 12,000, and has a lock-up period, highlighting the core of long-term investment in pension. Yi Haisheng, chairman of China National Pension Insurance, said that commercial pension insurance provides a good balance solution for helping the people achieve the safety, profitability, and liquidity of pension funds through the innovative structure of “account + product”.
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