SENIOR INSURANCE MANAGERS IN CHINA FACE LARGE FINES

Senior executives with Chinese insurers can be fined up to 100,000 yuan if they take part in activities that break relevant rules and regulations, according to regulations that will come into force from September 1. The Administrative Provisions on the Post-holding Qualifications of Senior Managers of Insurance Companies state that either a director or a senior manager at an insurance company who is directly responsible for any violation of China’s insurance Law would be given a disciplinary warning by the China Insurance Regulatory Commission (CIRC), or an order for dismissal, and/or a fine of between 20,000 yuan and 100,000 yuan. Infractions include policyholder deception, withholding of important information from customers, and refusal to pay when payment is merited. If an insurer refuses to carry out an order for dismissal, it can be fined between 100,000 yuan and 500,000 yuan. However, the CIRC has lowered the criteria for senior managers, with the requirement now being five years experience in the financial sector or eight years in business. Previously the requirement had been 10 years in finance or in business.