New Regulations Safeguard Insurance Consumption; China Life Implements Suitability Management to Strengthen the Protection Barrier

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（Source: Lianyungang Media Network）

Reprinted from: Lianyungang Media Network

In recent years, the insurance industry has been booming, offering a variety of insurance products to provide diverse protection options for our lives, playing an important role as an economic “shock absorber” and social “stabilizer.” However, some consumers encounter issues when purchasing insurance, such as not knowing which product is best, where to buy, or how much premium is appropriate.

During the “3.15” Financial Consumer Rights Protection Education and Promotion Campaign, the China Insurance Industry Association invited industry experts to educate the public on financial consumer protection knowledge, enhance risk prevention capabilities, promote lawful and rational rights protection, and strengthen consumers’ sense of gain, happiness, and security.

Xu Chongmiao, Chief Compliance Officer of China Life Insurance Co., Ltd. (hereinafter referred to as “China Life,” stock code: 601628.SH, 2628.HK), was invited to participate in the event. He discussed “Suitability Management” with consumers and how to use “Suitability Management” to purchase insurance products that suit themselves, making insurance truly a solid backing for a better life.

What is “Suitability Management”?

“Suitability management, at its core, means selling or providing appropriate products through suitable channels to suitable customers,” explained Xu Chongmiao.

The “Measures for the Management of Suitability of Financial Institution Products” (hereinafter referred to as “Measures”) issued by the China Banking and Insurance Regulatory Commission will fully take effect on February 1, 2026. These measures incorporate the suitability of insurance products into unified standards, preventing mismatches, misguidance, and disputes from the source. This marks a milestone for the insurance industry in protecting consumer rights, establishing clear behavioral guidelines and rigid constraints. From the perspective of insurance consumption, this new regulation provides tangible protection for consumers in three ways:

First, clear product classification and open information disclosure. Clear classification means distinguishing insurance products to help consumers recognize features and make rational choices. The Measures require financial institutions to consider factors such as product type, coverage responsibilities, and whether policy benefits are certain when classifying and grading insurance products. For example, life insurance can be divided into life insurance, annuities, health insurance, and accident insurance based on coverage; based on design, into ordinary, dividend, universal, or investment-linked types. Specific classifications and grades can usually be checked on the insurance company’s official website.

Second, pre-application assessment and risk acknowledgment. Before selling insurance products with a term longer than one year, financial institutions must analyze consumer needs and evaluate their financial capacity. When selling investment-linked or other products that may lead to capital loss, they must also assess risk tolerance. If mismatched needs, insufficient financial capacity, or low risk tolerance are identified, the institution will recommend discontinuing the application. If the consumer insists on purchasing, they must sign a written acknowledgment of their voluntary decision and assume the risks.

Third, special care for vulnerable groups, especially protection with warmth. The Measures pay particular attention to consumers over 65 years old, requiring financial institutions to exercise special caution when selling high-risk products to them, such as developing specific sales procedures, strengthening risk warnings, and providing more time for consideration. This reflects regulatory warmth and demonstrates human care for elderly consumers.

How to implement suitability management for scientific insurance and rational consumption?

“Good systems require active cooperation from consumers. To achieve ‘suitability management,’ insurance consumers should focus on five key points,” Xu Chongmiao emphasized.

1. Be truthful and conduct self-assessment. Before purchasing insurance, consumers are asked to fill out evaluation questionnaires. Some may hide true information or fill out forms carelessly to buy certain products, which is unacceptable. They should provide accurate, complete personal information, including financial status and health conditions. Only then can financial institutions recommend truly suitable products.

2. Clarify needs, avoid blindly following trends or comparisons. Based on factors like family lifecycle, health, and debt levels, consumers should identify core protection needs, avoid impulsive decisions, and ensure coverage matches their actual needs. For example, primary breadwinners should prioritize accident, life, and health insurance; retirees should focus on pension and long-term care planning.

3. Afford what you can, dynamically match financial plans. Premium payments should align with household income and cash flow. The Measures specify that for products like dividend, universal, or investment-linked policies with uncertain benefits, a lump sum premium should generally not exceed four times the annual household income, and annual premiums should not exceed 20% of household income, to avoid risking cash shortages due to high premiums.

4. Verify qualifications and carefully read policy terms. Purchase insurance through legitimate channels and qualified agents. The insurance contract is an important document for consumer rights; before signing, thoroughly review the “Insurance Application Tips,” “Risk Warning,” and “Product Terms,” paying close attention to coverage, exclusions, payment periods, cash value, and surrender rules. For products with uncertain benefits like dividend, universal, or investment-linked policies, pay special attention to risk warnings about benefits illustration.

5. Stay calm and make good use of the “Cooling-off Period.” Most life insurance policies include a cooling-off period (usually 15 days), during which consumers can cancel the contract and get a full refund. After purchasing, especially large or long-term policies, consumers should discuss with family members and review whether the product still fits their needs before keeping the policy.

Xu Chongmiao also offers tips for insurance consumers:

1. Insure rationally, ensuring coverage matches needs. Before buying, evaluate key factors such as age, occupation, income, health, and family responsibilities, and clarify core protection needs, financial capacity, and risk tolerance. Avoid impulsive decisions or following trends blindly.

2. Stay calm in emergencies and use official channels first. If any doubts arise during the process, contact official customer service hotlines, apps, service outlets, or authorized agents.

3. Be vigilant and beware of scams. Do not trust online messages claiming “full refunds,” “rights protection experts,” or “policy testing,” and do not disclose sensitive information like ID numbers, bank cards, or policy details to avoid falling into scams involving “代理退保” (agent-led policy cancellation) or other illegal activities.

“There’s no one-size-fits-all answer to insurance; only products that match your needs, financial situation, and risk tolerance can truly provide protection. Be rational, make careful decisions, and let’s work together to build a fair, transparent, and secure insurance consumption environment, where every protection is just right and every trust is worth entrusting,” Xu Chongmiao urged.

Initial review: Chen Si

Re-review: Gao Jin

Final review: Tong Daying

Source: China Life Lianyungang Branch