Qian Linhao reported that the China Banking and Insurance Regulatory Commission recently issued the "Notice on carrying out Life insurance and long-term care insurance liability conversion business pilot" (hereinafter referred to as the "Notice"), decided to carry out life insurance and long-term care insurance liability conversion business (hereinafter referred to as the "conversion business") pilot from May 1, 2023, the pilot period is tentatively set at two years.

According to reports, the CBRC organized industry forces to fully demonstrate the feasibility of the conversion of business, and studied and clarified a series of requirements such as responsibility conversion methods, applicable product scope, nursing status judgment conditions, and business operation processes, which were reflected in the "Notice". First, according to whether the insured enters the nursing state, the policy settlement method and actuarial equivalence method are designed respectively to meet the diversified needs of nursing security. The second is to choose individual ordinary life insurance to carry out the pilot, the policyholder and the insured are easy to understand, and the nursing payment amount is convenient to calculate. The third is to take specific diseases and accidental disability as the basic criteria for nursing status, which not only takes into account the unified standards of the industry, but also effectively covers the disabled population and is easy to operate. At the same time, life insurance companies are encouraged to expand the above basic judgment conditions in combination with their own risk control capabilities. The fourth is to encourage life insurance companies to increase the use of policy settlement method for liability conversion in insurance clauses when developing new ordinary life insurance products, so as to improve the supply capacity of long-term care security.

The "Notice" shows that personal insurance companies that operate personal ordinary life insurance can design pilot programs according to the requirements of the "Notice", submit the pilot program to the CBRC, and complete the registration of relevant products to participate in the pilot. At the same time, the "Notice" also clearly requires that the life insurance companies participating in the pilot should establish a conversion business operation system and internal management mechanism, strengthen business training and compliance assessment, and do a good job of data accumulation and analysis, information disclosure and pilot progress reports.

The CBRC said that in the next step, it will closely follow the pilot development, standardize business operations, strengthen supervision and management, and effectively safeguard the legitimate rights and interests of insurance consumers. At the same time, the pilot experience is summarized in a timely manner, the regulatory system is improved, the scope of products applicable to the conversion business is studied and expanded, the steady development of the conversion business is promoted, and the personal insurance industry is guided to contribute industry strength to the implementation of the national strategy of actively responding to the aging population.

Managing Editor: Yuan Hao