The logic of insurance sales bidding farewell to big-box stores: "Selling to anyone, promoting any product" will come to an end

In the past, consumers often complained that insurance only had “two exclusions”—this isn’t covered, and that isn’t covered; while industry insiders knew full well that the root of many disputes lay in “mismatches”: the sellers didn’t understand, and the buyers were confused. As long as they could sell the policy, it seemed anyone could push it, and any complex product could be sold. According to industry insiders, currently, some salespeople love to sell participating insurance, but they themselves haven’t fully grasped the corresponding products before pushing them to users.

On March 29, Beijing Business News reporters noticed that the China Insurance Industry Association recently released the “Self-Regulatory Norms for the Management of Insurance Product Suitability” (hereinafter referred to as “Self-Regulatory Norms”), which is attempting to break this rough logic that has persisted for decades. This document brings not only the regulatory “indicators” for product classification and personnel classification, but also a soul-searching examination for the industry: when salespeople can no longer navigate the market relying solely on “sales pitches,” and when the money of a 70-year-old will no longer be casually “misled” into high-risk policies, how should the insurance industry regain its proper form?

Farewell to “blindly rushing forward”: five-tier classification for sales “territories”

A detailed regulatory document regarding “seller responsibility” is about to be officially implemented.

Recently, the China Insurance Industry Association officially released the “Self-Regulatory Norms.” This is not only an implementation of the “Measures for the Management of Product Suitability of Financial Institutions” by the National Financial Regulatory Administration, but also a “bottom-level reconstruction” of the industry ecosystem. The norms consist of nine chapters and forty-six clauses, along with five operational attachments, forming a comprehensive regulatory system that covers product classification, sales qualifications, client assessments, matching sales, internal control management, and self-regulatory supervision. The “Self-Regulatory Norms” will take effect on July 1, 2026.

According to the “Self-Regulatory Norms,” the insurance sales shelf has been reorganized. Previously, whether it was a complex investment-linked insurance or a simple accident insurance, they were all crammed into the same “sales interface.” Now, personal insurance products are clearly divided into five categories: P1, P2, P3, P4, and P5, while property insurance is also classified into two tiers. Specifically, P1 category products are personal insurance products with a policy term of one year or less (including guaranteed renewal), including life insurance, health insurance, and accident insurance. P2 category includes ordinary personal insurance products with a policy term of more than one year, including life insurance, annuity insurance, health insurance, and accident insurance. P3 category includes participating personal insurance, universal life insurance, and exclusive commercial pension insurance. P4 category includes investment-linked personal insurance and variable annuity insurance. P5 category includes personal insurance products that are highly complex and have no guaranteed policy benefits.

This is not just a label; it is also a threshold. Correspondingly, there is a “tiered authorization” for sales personnel: the lowest-level sales personnel can only sell the most basic category products; only sales personnel who reach the highest level (level one) can be “authorized” to sell those complex P4 and P5 high-risk products.

“The ‘Self-Regulatory Norms’ construct a unified suitability management standard for the industry, ending the previous state of inconsistent standards among various institutions. From product design, sales qualifications, client assessments to internal control supervision, the entire chain framework aims to resolve sales misguidance and product mismatch risks from the source,” said Li Chao, an insurance lawyer from Beijing Shaohe Mingdi Law Firm, to Beijing Business News reporters. For the market, the release of the “Self-Regulatory Norms” will further push insurance sales from “product promotion” to “demand matching,” with professional capability becoming the core competitiveness.

What is more concerning is that this “ruler” begins to accurately measure the wallets of the elderly. The “Self-Regulatory Norms” propose a warm “firewall”: when insurance institutions sell P3 to P5 category insurance products to policyholders aged 65 and above, they must fulfill special duty of care. This means that when facing elderly individuals who tightly clutch their pension funds and have a yearning for “high interest” in their eyes, sales personnel can no longer be vague. They must ensure that the elderly truly understand and comprehend by using large font displays, audio prompts, on-site explanations, or even phone follow-ups.

In fact, the faint light of the regulatory document has already begun to flicker at the sales front. Beijing Business News reporters learned that some products have already embedded suitability management into their processes. In one product’s underwriting phase, the system requires the client to fill out an assessment questionnaire to evaluate their purchasing purpose and financial capacity. If the system determines “not suitable,” the policyholder can only choose to give up the application or reassess, or insist on applying after fully understanding, and this process will be completely recorded. This “reverse lock” mechanism is turning the past “sell first, assess later” into “no assessment, no transaction.”

The end of irresponsible sales: when “routines” hit the regulatory wall

“Hello, this is a call from the medical insurance service team, because you’ve already paid your health insurance in your local area, right?” If you’ve ever received such a call, you would likely be confused by the other party’s skilled customer service tone.

They don’t mention “insurance,” only talk about “supplemental medical”; they don’t discuss “payments,” only say “receive the electronic policy.” Even before consumers have figured out the situation, the other side has already attempted to guide them to open their phones and purchase one or two unnecessary insurance policies amid vague language.

An even more lamentable scene often occurs at bank counters. Mingxia (pseudonym) told Beijing Business News reporters that for her father, the dream of returning home to build a house for retirement shattered the moment he signed his name. Originally, the elderly man planned to deposit 50,000 yuan in the bank and live off the interest in a stable manner. However, under the “high interest” sales pitch of the bank staff, this deposit turned into a lifelong life insurance policy.

It wasn’t until the end of the year when he needed to change his card due to deduction issues that Mingxia discovered this “secret.” The policy stated that it was a lifelong life insurance policy with an annual premium of 50,000 yuan, requiring continuous payment for five years. This means that the elderly man’s 50,000 yuan was not only locked for five years, but even in the fifth year, the policy’s cash value was still lower than the paid premiums—he couldn’t even get back the principal. And the “bank interest” and “available at any time” promises used for comparison by the sales personnel now seem like nothing more than bait to lure him in.

“Nobody in the family knows about this; they (bank staff) are still being evasive, and they don’t openly and clearly inform the policyholder about the disadvantages.” Mingxia’s helplessness often went unresolved in the past due to a lack of evidence and difficulty in defining responsibility. But now, the newly released “Self-Regulatory Norms” are trying to put an end to such disputes.

Regarding these industry ailments, Long Ge, co-founder and general manager of Zhongtuobang, pointedly stated: “In the future, random selling will be very difficult to operate. For example, phone sales cannot start with selling right away; the system will force a customer needs questionnaire first, and if the answers are incorrect, they cannot sell. When selling to the elderly at banks, if the premium is too high or the product is too complex, the system will trigger an alert and force the use of large font and audio prompts for risks, and may even require family members to be informed. This fundamentally blocks the path of ignoring needs and forcing sales.”

Insiders believe that if insurance companies strictly implement the “Self-Regulatory Norms,” it will greatly enhance the standardization of sales and help improve the overall quality of consumers purchasing insurance products. Li Chao also emphasized that improper sales through banks to the elderly may be reduced or avoided; the release of the “Self-Regulatory Norms” will reduce inducements to purchase that disregard customer needs, confuse product nature, and use ambiguous language.

The evolutionary path: from “salesperson” to “family financial doctor”

As the era of “anyone can sell any type of insurance” comes to an end, what kind of people does the industry truly need?

The answer may lie in the already clear tiered authorization. Future insurance sales will no longer be a simple “human wave tactic,” but rather a competition about “professional compounding.” Low-qualification sales personnel will face elimination pressure, pushing the industry towards specialization and refinement.

Industry insiders believe that based on the product and personnel classification system, practitioners are required to possess qualities similar to “general practitioners”; they must not only understand insurance but also wealth management, health care, and even be able to mobilize medical and elderly care resources from institutions to provide clients with comprehensive life-cycle solutions. “In the future, insurance sales will resemble professional ‘family financial doctors,’” Long Ge envisioned. He told Beijing Business News reporters that future sales personnel cannot rely solely on their verbal skills; they must first “diagnose” the client’s family situation, income, and needs (by completing an assessment questionnaire) before they can match allowable products for sale from the system. Sales relying on misleading the elderly and verbal manipulation will gradually be eliminated, with the industry placing greater emphasis on professionalism and integrity.

This is not a fantasy. In Li Chao’s view, based on the product and personnel classification system, insurance sales will present the following upgrade trends. First, the sales process will shift from “product introduction” to “demand analysis - solution customization,” requiring sales personnel to first understand the client’s protection gaps and financial situation before recommending matching products. Insurance institutions should focus more on life-cycle services, shifting from single transactions to long-term relationship maintenance, providing comprehensive solutions that encompass risk protection, wealth management, and health care. Second, sales personnel need to continuously update their professional knowledge to obtain higher-level sales authorizations, promoting the overall professional level of the industry. Furthermore, suitability management requires embedding into business processes, utilizing technology to achieve sales qualification verification, risk matching checks, and recording processes; institutional assessments will also shift from purely performance-oriented to multi-dimensional evaluation of compliance, service quality, and customer satisfaction.

“Finally, services for special groups will be optimized, with more age-friendly designs. For example, online sales processes need to ensure age-friendliness, usability, and safety, allowing more time for consideration for the elderly. Moreover, regarding inclusive financial products, through product classification and simplified processes, low-risk, basic protection products will be more conveniently accessible to ordinary consumers,” Li Chao added.

Regardless, an era built on professionalism and trustworthiness is on the horizon. For those consumers who have been wary due to sales misguidance, this will be a long-overdue “vindication.” For the industry itself, this transformation from “big marketplaces” to “specialty stores” will ultimately allow insurance to return to its most fundamental essence: providing a sense of certainty and security when it is needed.

Beijing Business News reporter Hu Yongxin