China Banking and Insurance Regulatory Commission: Insurance companies should establish a mechanism to reclaim commissions and salaries from insurance salespersons who cause economic losses due to illegal activities.

The China Banking and Insurance Regulatory Commission issued a notice on promoting the reform of the personal sales system in the life insurance industry. The notice emphasizes that insurance companies should strengthen compliance management and risk monitoring in the design of personal sales systems, product development, behavior control, and expense management, in order to effectively identify abnormal sales behaviors and sales arbitrage risks, issue timely warnings and interventions, and protect the legitimate rights and interests of insurance consumers. It also calls for the establishment of a mechanism to recover commissions and salaries due to economic losses caused by illegal activities of insurance sales personnel, in order to effectively prevent operational risks. At the same time, insurance companies should conduct overall commission accounting based on established commission policies, expense budgets, and assessment mechanisms. They should establish commission incentive designs and deferred payment mechanisms that are consistent with product design, expense structure, business quality, and service level. For policies with premium payment periods of 5 years (inclusive) to 10 years, commissions should be paid out no sooner than 3 years; for policies with premium payment periods of 10 years or more, commissions should be paid out no sooner than 5 years. Insurance companies should encourage insurance sales personnel to stay long-term and continue to provide good service to customers. For different types of insurance sales personnel, insurance companies should establish a fair and reasonable commission incentive distribution mechanism to effectively protect the legitimate rights and interests of insurance sales personnel.In case of risks, timely warning and intervention should be carried out to protect the legitimate rights and interests of insurance consumers. Establish a mechanism for recovering commissions and salaries due to economic losses caused by illegal activities of insurance sales personnel, effectively preventing operational risks.Nine, adhere to customer-centricity. Insurance companies should establish a sound suitability management system, improve relevant risk management, training and assessment, professional norms, supervision accountability mechanisms, create a customer lifecycle service system, ensure that appropriate products and services are provided to appropriate consumers, better meet the growing insurance protection and wealth management needs of consumers. Give full play to the enabling role of technology, establish information platforms for team management, compliance management, and professional improvement, and enhance the level of intelligent customer service. Strengthen the behavior management of insurance salespersons, and not promote honor titles based solely on premiums, commissions, etc. Ten, enhance professional identity and sense of belonging. Insurance companies should actively strengthen communication with local governments, local insurance industry associations, and relevant departments, promote and support insurance salespersons to participate in social insurance, apply for residence permits in accordance with policies for flexible employees, effectively enhance the welfare and protection level of insurance salespersons. The China Insurance Industry Association should promote the establishment of a professional honor evaluation system for insurance salespersons with Chinese characteristics. Eleven, fully leverage the role of industry organizations. The China Insurance Industry Association should establish classification standards for life insurance products and grading standards for insurance salespersons, and organize insurance companies to prudently and orderly carry out the evaluation of insurance salesperson grades. Establish a sound system for the management and use of integrity information of insurance salespersons, and regulate the reasonable and orderly flow of insurance salespersons among market entities. Twelve, strictly regulate in accordance with the law. The China Banking and Insurance Regulatory Commission, and various banking and insurance regulatory bureaus, shall strengthen the supervision of legal persons in accordance with the law, pay attention to the scientific, stable, and sustainable nature of the personal marketing system. The regulatory authorities should strictly implement the responsibility of local supervision, strengthen investigation and inspection, enhance supervision of insurance sales activities, prevent sales deception and arbitrage risks. Institutions and individuals that violate regulatory requirements shall be seriously investigated and held accountable in accordance with the law. Differentiate between the personal responsibility of insurance salespersons and the company's management responsibility, and coordinate the due diligence exemption and double penalty for negligence. Thirteen, insurance professional agency, insurance brokers, as well as other institutions and channels engaged in the sale of life insurance products and the provision of insurance services, shall implement the relevant requirements of this notice. China Banking and Insurance Regulatory Commission April 14, 2025 This article is compiled from the official website of the "China Banking and Insurance Regulatory Commission", edited by GMTEight: Liu Jiayin.