“Get more than shareholders” is the mother tongue soup!Insurance Bureau: Selling dividend policies cannot use the company’s EPS for publicity

Is the Financial Supervisory Commission eyeing participating policies? There are three life insurance companies in China that sell participating policies, and they advertise that buying a branch policy means “investing” in this insurance company. Cai Huoyan, deputy director of the Insurance Bureau, said on the 23rd that the review will be completed before the end of the year and the new standards will be implemented in the first half of next year. In addition, he also solemnly stated how much insurance companies earn in earnings per share (EPS), the return rate and the distribution of dividend policies. The interest rates will not be the same, so we cannot promote it as “the company’s EPS is guaranteed” or “policyholders get more than shareholders”.

Further reading:Insurance versus the big devil!The Financial Supervisory Commission has decided to give a 15-year transition period, the longest in Asia

Currently, only two life insurance companies on the market, Prudential Life, which has been selling for many years, and Fubon Life, which is the main product this year, have launched participating insurance policies. Today (23rd) it was reported that BNP Paribas Life Insurance plans to join the participating insurance companies and become the third insurance company! Participating policies are actually a type of investment and financial management life insurance (commonly found in whole life, savings life or critical illness insurance with a savings component), which allows you to enjoy life insurance protection and policy profits. In addition to death claims, non-guaranteed benefits will also be distributed. “Dividends” are the difference between the insurance company’s investment income, mortality and expense rates and the expected rate.

As of June this year, the new contract premium (FYP) of Prudential Life’s participating policies was 11.8 billion yuan, accounting for more than 80% of the overall FYP; while the FYP of Fubon Life’s participating policies alone in July this year reached 3.67 billion yuan, surpassing the investment type Han Weiting, general manager of Fubon Gold, confirmed that the sales volume of insurance policies has reached 20%.

However, participating policies can easily cause controversy in their promotion, and they have recently been targeted by the Financial Supervisory Commission. Cai Huoyan confirmed today that amendments are currently being made to product review regulations, business specifications for participating policies, etc. The relevant draft hopes to reach consensus with the industry before the end of the year, and it will be put on the road in the first half of next year at the earliest. It will require improvements in product design and information disclosure. .

Cai Huoyan said that when the company makes profits, more than 70% of the participating policy is distributed to policyholders and 30% is left to shareholders. However, it can also be designed to give 80% to policyholders and 20% to shareholders, with high dividends and medium dividends. and low dividend levels. However, it is almost impossible to pay high dividends, because the company needs to maintain long-term stability and sustainability, so medium dividends are usually more likely. In addition, there will be different distribution rates for different currencies. For example, the dividend rate for Taiwan dollars is 3.5%, and the dividend rate for US dollars is 4%. Separating accounts will be fair to policyholders. If the distribution cannot be stable for two consecutive years, Report to the competent authority and propose an improvement plan.

As for the recent controversy over the promotion of participating policies, for example, an insurance salesperson announced, “The EPS of an insurance company is so high, buying this participating policy is an investment in this company,” “Guaranteed dividends,” or “The policyholder earns More than shareholders”. Cai Huoyan said that this is not allowed to be promoted. He emphasized that the return rate of EPS and participating policies will not always be the same. EPS cannot be used to promote it, nor can it be attached with a guarantee.