China Life Exploits Loophole, RMB Policies Halted Urgently

China Life's RMB policies are suspected of "exploiting a loophole," and the Financial Supervisory Commission urgently called a halt, requiring China Life to stop selling RMB policies.

The Financial Supervisory Commission recently announced that the first batch approved included RMB policies issued by Shin Kong Life, China Life, CTBC Life, Cathay Life, Fubon Life and Global Life, and that life insurers could begin selling them.

Under the Financial Supervisory Commission's rules, the first RMB policy sold by each life insurer must be reviewed and approved by the Financial Supervisory Commission; for the second policy, if the product has similar relevant conditions, it only needs to be filed for record, meaning the documents must be submitted to the Financial Supervisory Commission within 15 days of the start of sales.

But the Financial Supervisory Commission found that the "China Life Foreign Currency Insurance" submitted by China Life for review was a term policy with a 6-year payment period and 10-year coverage period; yet it immediately began selling a second RMB policy that was a whole life insurance policy, and publicly claimed that the second policy was better than the first.

The Financial Supervisory Commission believes that life insurers must not take a chance by submitting a relatively simple RMB policy for review while making a more complex RMB policy the main offering, and therefore required China Life to stop selling RMB policies.