Two foreign-funded institutions have landed, and the approval of insurance intermediary licenses has been opened again after five years. How will new members stir up the market? | slotvivo, tajir4d
It was the first time in five years to "break the ice." On November 8, a reporter from Beijing Business Daily noticed that the State Financial Supervision and Administration Bureau recently approved BMW (China) Insurance Brokers Co., Ltd. (hereinafter referred to as "BMW Insurance Brokers") and Angu Fangsheng Insurance Brokers Co., Ltd. (hereinafter referred to as "Angu Fangsheng Insurance Brokers") to operate insurance brokerage business.
These are the two insurance brokerage licenses approved by the regulatory authorities after a lapse of five years after the suspension of insurance brokerage license approval in 2018. Industry experts predict that in the past two years, many insurance intermediary market entities have withdrawn. The liberalization of insurance intermediary licenses can appropriately supplement new market entities. It is expected that new licenses may be approved in the future. The foreign investment status of the two institutions is a concrete manifestation of the high-level opening up of my country's financial industry, which means that the door of my country's insurance industry will open wider and wider to the outside world.
"Breaking the ice" after five years
On November 8, the State Administration of Financial Supervision issued the latest approval document showing that BMW Insurance Brokers and Angu Fangsheng Insurance Brokers were simultaneously approved to operate insurance brokerage business in the administrative jurisdiction of the People's Republic of China (excluding Hong Kong, Macao, and Taiwan).
The approved business scope of the two companies includes: formulating insurance plans for policyholders, selecting insurance companies and handling insurance procedures, assisting the insured or beneficiaries in making claims, reinsurance brokerage business, providing disaster prevention, loss prevention or risk assessment, risk management consulting services to the client, and other insurance brokerage-related businesses stipulated by the State Administration of Financial Supervision.
It is worth noting that these are the two insurance brokerage licenses approved by the regulatory authorities after a lapse of five years after the suspension of the approval of insurance intermediary licenses in 2018. According to the "Implementation Measures for Administrative Licensing and Filing of Insurance Intermediaries", if a national insurance professional agency applies for the qualification to operate insurance agency business, it shall be accepted and initially reviewed by the China Banking and Insurance Regulatory Bureau in the place where the industrial and commercial registration is registered, and the State Administration of Financial Supervision (formerly the China Banking and Insurance Regulatory Bureau) shall make a decision. However, since August 2018, the former China Banking and Insurance Regulatory Commission has not issued another insurance intermediary license.
With the rapid development of the domestic insurance industry, there is a huge market demand for insurance intermediary licenses, and many mainstream car dealers, including Tesla, have successively launched insurance brokerage companies. In order to truly operate the insurance business legally, self-established institutions will not be able to obtain licenses in a short period of time, and acquisitions have become a helpless choice for many institutions. This time, two insurance brokerage companies were approved to carry out business, breaking this "frozen" state. Returning to the state of capital harvesting insurance intermediary licenses has allowed more capital to see the possibility of entering the insurance field.
“Regulatory agencies may moderately liberalize the access of insurance intermediaries based on market conditions in the future.” Li Wenzhong, deputy director of the Rural Insurance Research Institute of Capital University of Economics and Business, said that in recent years, insurance intermediary market entities have withdrawn more frequently, and liberalizing insurance intermediary licenses can appropriately supplement new market entities. With entry and exit, it can enhance market vitality and continuously improve the quality of insurance intermediary services. This can be seen as the regulator opening the market access for insurance intermediaries, and new licenses may be approved in the future.
In the view of IPG China Chief Economist Bai Wenxi, opening up licenses can provide more development opportunities for domestic insurance intermediary companies and promote innovation and development in the industry. and obtain a licenseThe company can provide more insurance brokerage services to meet the diverse needs of consumers.
Obvious foreign investment background
What also attracts attention is the foreign investment status of the two approved institutions. The National Enterprise Credit Information Publicity System shows that BMW Insurance Brokerage was established in October 2022, and its legal representative is Xi Anlun. In terms of shareholders, Bavaria Wirtschaftsagentur GmbH and BMW Brilliance Automobile Co., Ltd. hold 58% and 42% of the shares respectively; the legal representative of Angu Fangsheng Insurance Brokerage is Si Yongming, who is also the CEO of Angu China. In terms of shareholders, Beijing Foreign Enterprise Human Resources Service Co., Ltd., Angu Group Co., Ltd., and Angu Insurance Financial Brokerage Co., Ltd. hold 34%, 33%, and 33% of the shares respectively.
Two foreign-funded insurance brokerage companies were the first to be approved. What signal does it send? Bai Wenxi believes that this shows that China has become more open to foreign-funded insurance intermediary companies and that foreign-funded companies have more development opportunities in the Chinese market. This will also help attract more foreign investment into the Chinese insurance market and promote the international development of the market. At the same time, the entry of foreign-funded companies will also bring more international experience and advanced management concepts, which will play a positive role in promoting the development of China's insurance market.
Li Wenzhong further analyzed that the recently held Central Financial Work Conference pointed out that efforts should be made to promote high-level financial opening up, steadily expand institutional opening up in the financial field, improve cross-border investment and financing facilitation, and attract more foreign financial institutions and long-term capital to develop businesses in China. The approval of two foreign-funded intermediaries is a concrete manifestation of my country's insurance regulatory agencies implementing the spirit of the Financial Work Conference and achieving a high level of opening up of the financial industry. It means that the door of my country's insurance industry will open wider and wider to the outside world.
On November 8, Li Yunze, Secretary of the Party Committee and Director of the State Administration of Financial Supervision, delivered a keynote speech at the opening ceremony and plenary session of the 2023 Financial Street Forum Annual Meeting, saying that the opening up of China’s financial industry is a proactive opening, a steady and orderly opening, and a mutually beneficial and win-win opening. In the future, we will accelerate the improvement of the pre-establishment national treatment plus negative list management model, further relax the market access requirements for foreign-invested institutions, continue to enhance the transparency, stability and predictability of financial systems and policies, and strive to create an institutional environment for prudent operations and fair competition.
Strict supervision of insurance intermediaries continues
Previously, my country's insurance intermediary market has gone through the initial stage, the market-oriented development stage, the clean-up and rectification stage, and is currently ushering in the stage of promoting the construction of a new insurance intermediary market system.
Many domestic insurance intermediary companies have experienced a lot of ups and downs in recent years. For example, the "Measures for the Supervision of the Informatization Work of Insurance Intermediaries" (hereinafter referred to as the "Measures") that will be implemented in 2021 proposes that within the one-year rectification and self-examination period after implementation from February 1, 2021, if the construction of the information system is not completed, the insurance intermediary business will not be allowed to operate. In June 2022, the former Intermediary Department of the China Banking and Insurance Regulatory Commission issued the "Notice on Issuing the Work Plan for Rectifying the Problem of "Many and Scattered" Insurance Intermediaries", which clarified the "clearance" of three types of insurance intermediaries, that is, the cleanup and elimination of insurance intermediaries with "no personnel, no premises, and no business".
Now that new institutions are able to enter the market, does it mean that the domestic insurance intermediary market, which has been comprehensively cleaned up and rectified, has returned to the normal development track? Li Wenzhong said that first of all, it should be said that the comprehensive clean-up and rectification of the domestic insurance intermediary market has achieved good results in the past. A large number of intermediaries with low service quality and irregular market behavior have been cleared out of the market, making the insurance intermediary market more orderly. Secondly, it cannot be considered that the insurance intermediary market has completely returned to normal.After all, market entities are mixed, and there are still many cases of market misconduct. This year's regulatory penalties have not dropped significantly compared with the previous year.
Indeed, judging from the regulatory penalties, some insurance intermediaries have recently been fined millions in fines, and some have had their licenses revoked. For example, Hangzhou Pengli Insurance Agency Co., Ltd. was fined a total of 1.68 million yuan, and Beijing Jingxinlian Insurance Sales Co., Ltd. and Beijing Hongfengxin Insurance Agency Co., Ltd. both had their business licenses revoked for refusing or obstructing legal supervision and inspection.
As for the future insurance intermediary market, Bai Wenxi said that first of all, market competition will further intensify, and existing insurance intermediary companies need to improve their service quality and competitiveness to maintain market share. Secondly, new companies entering the market may bring more innovations and new business models, which will have a certain impact on the market structure. At the same time, market supervision departments also need to strengthen supervision of the market to ensure the healthy development of the market.
