"Banking and payment integration" upgraded again: regulatory authorities draw multiple red lines

Source: The Financial Times

Since the beginning of this year, personal insurance companies have recorded a substantial increase in new-premium business through the bank-insurance (bank agency) channel. While the bank-insurance channel has returned to being the industry’s number-one sales channel, it has also become the primary engine driving growth in new business value, achieving simultaneous growth in both scale and value. However, as the business races along the “fast track,” warning signs of potential risks—such as certain sales that do not comply with regulations and issues in expense management—have again begun to appear. In response, regulatory authorities have moved decisively to further strengthen expense controls.

Insiders say that recently, the National Financial Regulatory Administration issued the “Notice on Further Strengthening Expense Management for Bank Agency Channels” (hereinafter referred to as the “Notice”) and the supporting “Questions and Answers on Relevant Matters Concerning Expense Management for Bank Agency Channels (I)” (hereinafter referred to as “Q&A I”). These measures aim to strengthen supervision of insurance business conducted via bank agency channels, continue to deepen the “report-to-regulator and commission-to-be-paid in line” (“report-and-pay in alignment”) reform for bank insurance, and further implement insurers’ management responsibilities.

So-called “report-and-pay in alignment” means that when an insurance company actually sells products, the commission payment standards must be completely identical to those standards submitted to regulators when the product was initially reported and filed.

To prevent the industry from returning to the vicious path of competing on commission in the course of growth, the Notice provides strong supplementary measures to earlier policies. The Notice clearly requires that when insurance companies submit product filings for bank agency channel products, they must, in accordance with the requirements of the smart verification system for personal insurance product filing, separately report the levels of—commissions paid to banks, salary and incentive rewards for bank-insurance specialists, training and customer service fees, allocated fixed expenses, and so on. When insurance companies conduct business via bank agency channels, they must implement the expense policies according to the actuarial report of the product that has been filed. Any expense expenditure must obtain genuine, lawful, and valid documentation.

The Notice requires incorporating “report-and-pay in alignment” compliance management into the insurer’s internal performance evaluation and accountability mechanism:

• The insurer’s board of directors must, at least once every year, hold a special session to hear a report on “report-and-pay in alignment”;

• The general manager is responsible for work related to “report-and-pay in alignment”;

• The chief actuary is responsible for product design;

• The person in charge of finance is responsible for matters related to financial management;

• Senior management personnel in charge of bank agency channels are responsible for managing the authenticity and compliance of expense expenditures for bank agency channels and of business-promotion activity initiatives;

• The main负责人 of heads of institutions at all levels are responsible for the “report-and-pay in alignment” work of their respective branches and offices.

With regard to the “workarounds” and gray areas that have previously tended to appear in industry practice, the supporting “Q&A I” provides further standardized requirements. It requires that insurance company institutions at all levels must implement account ledger management for business-promotion activity initiatives, recording item by item information such as time, location, institution, and personnel, and attaching the relevant supporting documents. Insurance companies must obtain genuine, lawful, and valid documents, and include expenses for business-promotion activity initiatives in training and customer service fees. They must truthfully list and disburse all expenses under incentive schemes, among which, remuneration and rewards paid to bank-insurance specialists must be included in the salary management of bank-insurance specialists. Insurance company institutions at all levels must formulate incentive schemes in a standardized manner. After approval by the main负责人 of the provincial-level institution or by the负责人 of the head office, provincial-level and lower branch institutions may implement the incentive schemes; after approval by the general manager, the head office may implement the incentive schemes.

“Q&A I” specifically sets out multiple “regulatory red lines”:

• Insurance companies may not require or imply that bank-insurance specialists use their compensation to carry out business-promotion activity initiatives;

• Insurance companies must truthfully record expenses advanced by bank-insurance specialists for providing bank agency channel services and include them in training and customer service fees. They may not distribute the related amounts under the name of bank-insurance specialists’ compensation;

• Insurance companies must, according to the principle of “who benefits, who bears the burden,” and based on relevant rules and regulations, reasonably allocate shared expenses arising from joint business-promotion activity initiatives carried out through multiple channels to the bank agency channel. They may not shift expenses to other channels by not allocating or by allocating too little.

Regarding inspections, the Notice requires that local dispatched institutions continue to carry out on-site inspections of “report-and-pay in alignment,” establish an industry notification mechanism for violations and typical cases related to “report-and-pay in alignment,” and promptly report relevant information to the regulatory authorities of insurance group headquarters and its legal-entity institutions.

Looking back at the policy timeline, the “report-and-pay in alignment” for bank-insurance (bank agency) channels has been rolled out since 2023. In August 2023, the National Financial Regulatory Administration issued the “Notice on Regulating Insurance Products via Bank Agency Channels,” which placed constraints on commissions in the bank insurance channel. In January 2024, the regulator again issued the “Notice on Relevant Matters Concerning the Regulation of Business via Bank Agency Channels of Life Insurance Companies,” strictly prohibiting insurers from paying additional expenses off the books and in secret under names such as issuance fees or information fees.

Industry insiders say that the issuance of this Notice and Q&A indicates that regulation of the bank-insurance channel is moving from macro-level commission restrictions toward micro-level precision management and full-chain, penetrating accountability. This will drive the bank-insurance channel to achieve healthier, more sustainable, high-quality development in 2026.

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责任编辑：曹睿潼