The insurance industry continues to be strictly supervised, and the penalties in 2023 are unprecedented, and the number of fines and the amount of fines in 2022 have not been maintained. On January 1, according to incomplete statistics from a reporter from Beijing Business Daily, the total amount of fines issued by the State Administration of Financial Supervision for the insurance industry in 1 will reach 2023 million yuan, a year-on-year increase of 3.26%, the most in recent years. Behind the more than 41,7 fines, millions of large fines, fines for the head office, suspension of new companies and bans on entering the insurance industry will occur from time to time in 1500, and all of them will increase compared with 2023. There are "changes" and "unchanged", and among the many reasons for violations, the preparation of false materials, false expenses, and rebates are still stubborn diseases in the industry. So, under the trend of strict supervision, how should insurance institutions change?
The fine and confiscation exceeded 3 million yuan
In 2023, the number of fines issued by the State Administration of Financial Supervision to the insurance industry will be about 1530,2022, an increase of 34.33% compared with <>.
The increase in the number of fines has also led to the expansion of the scale of fines, which has reached a new high in recent years. In 2023, the amount of fines imposed by the insurance industry will be 3 million yuan, a year-on-year increase of 26.41%. Among them, the fines involving insurance institutions amounted to 7 million yuan, and the total fines involving executives and individuals were 2.66 million yuan. According to previous statistics from a reporter from Beijing Business Daily, the amount of fines in the insurance industry in 6013, 2020, and 2021 will be 2022 million yuan, 2 million yuan, and 2 million yuan respectively.
From the perspective of branches, the number of fines and fines of property insurance companies are still the first among all types of companies. Property and casualty insurance companies were fined a total of 1 million yuan, accounting for 78.54% of the total fines. The second place was the life insurance company, which was fined a total of 6.9935 million yuan, accounting for 7.30% of the total fine. The total number of insurance intermediaries with a large number of institutions and miscellaneous institutions was fined and confiscated a total of 37.4864 million yuan, and the increase in fines was the most obvious, with a year-on-year increase of 3%.
In the eyes of industry insiders, most of the penalties imposed by property insurance companies are one-year businesses, and while the frequency of new business is higher, it is also easy to lead to frequent violations. The increase in the scale of fines for insurance intermediaries reflects that in the current external environment, some intermediaries with weak competitiveness often use unfair means to participate in competition. Second, behind the occurrence of serious violations, there are large loopholes in the internal control and compliance management systems of some small and medium-sized insurance intermediaries.
At present, China's insurance supervision situation continues, and issuing fines to relevant entities is an important means of insurance supervision. Wang Deming, a member of the Legal Professional Committee of the Insurance Society of China and a senior consultant of Lantai Law Firm, believes that judging from the above-mentioned regulatory penalty data, the trend of strict supervision and strong supervision is very obvious.
In the view of Li Wenzhong, deputy director of the Rural Insurance Research Institute of the Capital University of Economics and Business, at present, the external environment for economic and financial development is more complex, and it is very important to ensure financial security. Therefore, strict supervision will continue.
"It is expected that the overall situation of strong supervision and strict supervision will not change in the next stage, and the State Administration of Financial Supervision has repeatedly emphasized that supervision should be 'long teeth and thorns', and it is expected that regulatory penalties will continue to increase." Wang Deming also said.
25 sub-agencies received millions of fines
In 2023, the total number of insurance institutions or branches of insurance institutions fined more than one million yuan will reach 25, far exceeding the 2022 in 15.
In 2023, the insurance institutions involved in fines with an amount of more than one million yuan include not only leading insurance companies, but also small and medium-sized insurance institutions and insurance intermediaries. Such as CPIC Property Insurance, Fosun Prudential Life Insurance, Zhonglu Property Insurance, Chang'an Liability Insurance, Chengtai Property Insurance, Huahai Property Insurance, Hangzhou Pengli Insurance Agency, etc.
It is worth mentioning that in 2023, the regulator will frequently impose penalties on the head office of insurance institutions. For example, in September 2023, Zhonglu Property Insurance was fined a total of 9.212 million yuan for individual personnel who actually performed their senior management duties without approval, borrowed channels to carry out investment in high-risk areas on their own in disguise, and falsely underwrote non-auto insurance business. In December 2023, Chengtai Property Insurance was fined for failing to use insurance funds in accordance with regulations and other violations of laws and regulations, and the company was fined a total of 12.110 million yuan.
Top-level penalties are not uncommon. Taking the lifetime ban as an example, according to incomplete statistics from a reporter from Beijing Business Daily, in 2023, 12 people will receive a lifetime ban from the insurance industry, and another 1 person will be ordered to be banned from engaging in loss adjustment business for life.
The normalization of top-level penalties is also reflected in orders to stop accepting new business, suspend business for rectification, revoke qualifications, and revoke business licenses. For example, Yongcheng Property & Casualty Insurance Shanghai Branch was ordered to stop accepting new litigation property preservation liability insurance business for 3 months due to violations such as fictitious insurance intermediary business arbitrage fees and preparation of false documents. Li, as the person directly responsible for the false expenses of the Guiyang branch of Shengyuanxiang Insurance Agency, was disqualified. Henan Zhonghe Automobile Insurance Agency Hebi Branch was not only disqualified from his post due to violations such as failing to set up special account books in accordance with regulations, but also ordered to suspend business for one year for rectification.
In the eyes of industry insiders, this normalized top-level punishment will help deter insurance companies, enhance their awareness of compliance management, and protect the rights and interests of consumers by punishing violations.
It is worth noting that in the context of the continuous or even further strengthening of strict supervision of the insurance industry, if the insurance industry does not pay more attention to reducing violations of laws and regulations, it will bring many adverse effects. Among other things, Li Wenzhong said, financial risks are often hidden in violations of laws and regulations; Violations of laws and regulations often harm the interests of consumers; The existence of a large number of violations of laws and regulations will affect the social image of the insurance industry and have a negative impact on the long-term development of the industry.
"There is a lot of pressure on insurers to manage their compliance risks." Based on this, Wang Deming said that the first is the risk of regulatory penalties, which has a direct impact on the company's regulatory rating and qualification approval, the second is that the supervision emphasizes the double penalty system, and the risk of punishment for managers at all levels increases, and the third is to face the pressure of internal accountability of the company.
How to say goodbye to old and new problems together
False listing of expenses, giving benefits outside of the contract, failure to use insurance terms or rates in accordance with regulations, fictitious business arbitrage funds, preparation of false financial information... For a long time, the reasons for fines in the insurance industry have been hidden in areas such as sales and claims, internal control and compliance, and financial and business data.
With regard to the common violations such as compiling and providing false reports and giving policyholders benefits other than those stipulated in the insurance contract, Li Wenzhong said: First, the occurrence of insurance accidents is probable, and the risks may be covered up, which also brings the possibility of excessive competition among insurance institutions. Second, the development of the insurance industry has entered a new stage, and the competition has become more intense, and some institutions that are not strong in the market can only compete for business by violating laws and regulations. Thirdly, the internal performance appraisal plans and standards of insurance institutions have not been able to adapt to the development and changes of the industry in a timely manner, resulting in some departments and personnel violating laws and regulations for the sake of performance.
Wang Deming also said that the current pressure on the compliance operation of the insurance industry is very high, and the root cause is that the market competition is in the initial stage, and the homogeneity of products is mainly the competition of price and handling fees. Behind the problems such as the preparation and provision of false reports is often the problem of illegal payment of handling fees, and the problems of giving benefits to policyholders other than those agreed in the insurance contract are linked to rebates, and this kind of market disease is difficult to cure, and the root cause is the lack of differentiation of insurance products and services.
In addition to common violations such as misleading sales, deception of policyholders, false underwriting, false listing of expenses, cross-regional underwriting, and loss of licenses, the use of insurance funds and bancassurance channel fees will become key areas of regulatory attention in 2023. For example, the reasons for the penalty include: carrying out domestic and foreign equity investment before filing; Insurance products with uncertain policy benefits are sold through bancassurance channels, and some policyholders do not meet the age requirements in regulatory regulations and are not manually underwritten.
So, in view of the common violations of laws and regulations and the "emerging" violations, what specific measures do insurance institutions need to take to avoid them in the next step? Li Wenzhong said that in order to reduce violations of laws and regulations, insurance institutions need to strengthen compliance education and management, and improve the compliance awareness and quality of branches and employees. Second, insurance institutions should continuously adjust and optimize performance appraisal plans and standards according to the development and changes of the industry and themselves. Thirdly, insurance institutions should strengthen communication and coordination with regulators.
Wang Deming also said that for insurance institutions, it is necessary to take active measures to prevent risks. On the one hand, it strengthens internal control management and compliance risk management, and prevents and controls a high number of violations such as providing false reports, paying handling fees in violation of regulations, and giving benefits other than insurance contracts to policyholders. On the other hand, in the long run, it is necessary to accelerate the transformation of business methods, starting with the diversity of products and services, to meet the diversified market demand, and no longer just the competition of price and handling fees.
Beijing Business Daily reporter Hu Yongxin