China's National Financial Regulatory Administration has issued a notice strengthening regulation of universal-type life insurance, aiming to curb practices seen as weakening protection features, creating non-standard account operations, or driving more aggressive investment of universal life funds. The measures cover product design, operations and distribution. Insurers may adjust the minimum guaranteed interest rate on universal life products if they meet specified constraints, while the cap on basic premiums for regular-premium universal life insurance is to be raised to encourage longer-term products. Insurers are prohibited from developing universal life products with terms of less than five years, and are encouraged to use design levers such as surrender charges and persistency bonuses to extend actual policy duration. The notice also requires full-process standardisation of account operations, prudent setting of declared settlement rates based on actual account investments, and tighter rules on the use of special reserves. On asset management, it tightens concentration and non-standard investment oversight by setting stricter limits, and bans improper related-party transactions conducted through multi-layer structures or channel business. For distribution, a sales “negative list” will be introduced alongside enhanced supervision. The regulator indicated it will focus on implementing the notice to better protect consumer interests.
China Banking and Insurance Regulatory Commission 2025-04-25
China's National Financial Regulatory Administration tightens universal life insurance supervision with a five-year minimum term and stricter account, investment and sales controls
China's National Financial Regulatory Administration has issued a notice to strengthen regulation of universal-type life insurance, targeting practices that weaken protection features and promote aggressive investments. Key measures include raising the cap on basic premiums, prohibiting terms under five years, and introducing a sales "negative list." The notice mandates standardizing account operations and tighter asset management oversight to protect consumer interests.