• The CIRC completed pricing reforms for the life sector in 2016.
  • With the reform, insurers are free to set their own guaranteed interest rates up to 3.5% for universal life policies, and up to 3.0% for participating life policies.
  • Higher rates need CIRC approval (p20)
• Effective 1 January 2017, insurers have needed to assess and report their unit linked and VA products based on the SMP definition.
  • Control on high-cash-value insurance products34 ("short- and mid-term insurance products", SMP)  (p23)
  • They should not design whole life, annuity, LTC products as SMP, but should assess the expected duration of products with universal insurance and unit-linked insurance as riders to judge whether it is SMP.  (p23)
• Traditional and universal policies were the key drivers behind business growth in 2016 (+55.3% and +443.7% respectively).
  • The huge growth in the universal life segment was in part due to liberalisation of investment regulations and interest rate caps by the CIRC, which allowed some life insurers to repackage universal life insurance from long-term flexible savings products into a kind of short term, high-yielding wealth management product

2018 02 - Swissre - The Chinese Insurance Market - 39p