To give full play to the role of insurance in risk management, meet the needs and expectations of the public for risk protection by the property insurance industry, and promote high-quality risk management, China Banking and Insurance Regulatory Commission (CBIRC) recently issued the Opinions on Promoting Risk Mitigation in Property Insurance Industry (hereinafter referred to as the “Opinions”).

The Opinions points out the significance of promoting risk mitigation via insurance. The property insurance industry should stick to the fundamental role of insurance to provide risk protection, and always take serving the people, society and the economic development as their mission. They should operate in compliance with rules and regulations, make overall plans and continuously improve their risk management services.

The Opinions requires that insurance companies expand their service scope and actively assist insured enterprises to carry out risk management such as risk assessment. It is necessary to broaden the scope of services and actively provide risk mitigation and protection in various property insurance businesses such as liability insurance, auto insurance and agricultural insurance. Insurance companies are encouraged to enrich the forms of risk mitigation and improve the availability and convenience of services. They may set up service teams or entrust professional third-party institutions to provide in-depth and refined services. The insurance services may be extended to the upstream and downstream industries of the insured enterprises, to provide customers with one-stop service solutions.

According to the Opinions, insurance companies should study and formulate the overall plan for risk mitigation and protection commensurate with their own conditions, and gradually improve and implement it. Insurance companies are encouraged to strengthen internal controls, and enhance human resources management and capacity building. Efforts should be made in the construction of information systems, as well as innovation in technological applications. It is encouraged to promote research and studies, and constantly consolidate the foundation for risk mitigation and protection.

The Opinions emphasizes that all companies shall carry out insurance services for risk mitigation and protection in accordance with the law, conduct accounting treatment strictly in line with accounting standards, and safeguard consumers' rights and interests. Misleading or dishonest advertising, deceptive promises, and forced bundled sales are forbidden. Violations and illegal activities such as swindling fees through providing services for risk mitigation, illegal selling and leaking of information are strictly prohibited.

The Opinions sets clear requirements that all CBIRC local offices should coordinate various resources from relevant parties, constantly work in collaboration to optimize the policy environment of the property insurance industry for risk mitigation, and guide property insurance companies to improve service quality and efficiency. Insurance companies should strengthen personnel training, and insurance industry associations should enhance the sharing and exchanges of information, and promote the sustained and healthy development of the property insurance industry in risk mitigation.

Appendix: Opinions of the CBIRC General Office on Promoting Risk Mitigation in Property Insurance Industry