Behind the Return of the Banking and Insurance Channel to the Center Stage: Regulators Strike Hard Again, "Unified Reporting and Banking" Leaves No Backdoor

Ask AI · Life insurance agencies return to center stage in bank-insurance channels—why is regulation stepping in now?

Our reporter Wu Min, from chinatimes.net.cn, Beijing

A regulatory storm affecting the “money bags” of bank-insurance channels is quietly escalating.

On March 30, The Huaxia Times’ reporter learned from industry insiders that the Life Insurance Regulatory Division of the National Financial Regulatory Administration has recently issued the “Notice on Further Strengthening the Fee Management of Bank-Insurance Agency Channels” (hereinafter the “Notice”). Using seven Q&A formats, it directly targets core loopholes in bank-insurance channel fee management, including commission payments, compensation and incentives for bank-insurance agents, temporary incentive plans, business promotion activities, and even the allocation of shared expenses—all brought under a tightly regulated “reporting-to-approval alignment” compliance framework.

This means that the “reporting-to-approval alignment” regulation launched in August 2023—after nearly three years of market testing—has officially entered a stage of fine-grained, “deep-water” controls.

This timing coincides with a key juncture for bank-insurance channels to reclaim the top spot among life insurance channels. In 2025, amid pressure on the individual agency channel, the bank-insurance channel reclaimed the throne with a premium volume of 3,973 billion yuan and double-digit growth. Moreover, the new business value of five A-share listed insurers’ bank-insurance business surged across the board.

Zhu Junsheng, a postdoctoral fellow and professor at Peking University’s School of Applied Economics, said in an interview with The Huaxia Times’ reporter that bank-insurance channels are undergoing a regulator-driven phase of deep restructuring. In the short term, it manifests as fee reductions and reshaping of the competitive landscape; in the medium to long term, it is a transition process from “fee-driven” to “value-driven” growth.

“Reporting-to-approval alignment” upgraded again: from fee reporting to end-to-end transparency

Looking back at the regulatory trajectory of “reporting-to-approval alignment,” in August 2023, the National Financial Regulatory Administration issued the “Notice on Regulating Insurance Products Sold Through Bank Agency Channels,” which first imposed hard constraints on commissions in bank-insurance channels. At the time, the core logic was simple and direct: the standard of commissions and fees actually paid by insurance companies must be exactly the same as the standard submitted when the product was filed with regulators. This was meant to curb fee-related chaos at the source.

The latest “Notice,” however, extends regulators’ reach into the fine capillaries of fee management. Under the requirements, when an insurance company files for record of products sold through bank agency channels, it must separately specify levels for commissions paid to banks, compensation incentives for bank-insurance agents, training and customer service fees, and allocated fixed expenses, among others.

More importantly, regulators’ requirements for the authenticity of fees have reached an unprecedented level of granularity. When insurance companies carry out bank-insurance business, they not only must implement fee policies according to the actuarial report filed, but they also must ensure that every fee expenditure is supported by real, lawful, and valid documentation.

Meanwhile, “reporting-to-approval alignment” compliance management has been formally incorporated into internal performance evaluation and accountability mechanisms. The board of directors must review a situation report at least once per year; the general manager is accountable overall; the chief actuary is responsible for product design; the finance负责人 is responsible for financial management; executives in charge of bank-insurance are responsible for the authenticity and compliance of fee expenditures and business promotion activities,

“This policy moves the responsibility mechanism up to the corporate governance level—from the board of directors to executives to heads of branch-level institutions—forming a full-chain accountability system. This means that reporting-to-approval alignment has risen from a single compliance requirement to a fundamental constraint on corporate operations,” Zhu Junsheng said. In the short term, it is about regulating fees and reducing costs; in the medium to long term, it is about pushing the industry to shift from competing on fees to competing on products, services, and management capabilities, laying the institutional foundation for the sustainable development of bank-insurance channels.

The supporting release of the “Q&A on Matters Concerning Fee Management in Bank-Insurance Agency Channels (Part One)” goes even further to clarify many practical areas where implementation had been ambiguous. For example, insurance companies may not pay any fee other than commissions to banks under names such as policy issuance fees, information fees, or technical service fees. Bank-insurance agents’ compensation should, in principle, be paid via bank transfer, and it must be ensured that agents are aware that their compensation has no designated purpose and can be independently disposed of. Temporary incentive plans may be implemented only after approval by the main responsible person of the provincial-level institution or the person in charge of the head office. Business promotion activities must be managed via ledger records, with time, location, personnel, and other information recorded for each item. For shared expenses in joint activities across multiple channels, allocation must follow the principle of “who benefits, who bears the costs,” and costs may not be shifted to other channels.

Of particular note is that regulators have clearly prohibited using commission balances, training and customer service fee balances, and similar leftover funds to adjust and distribute compensation to bank-insurance agents. This rule precisely cuts off the gray area where insurance companies could attempt to circumvent “reporting-to-approval alignment” through fee shuffling.

In Zhu Junsheng’s view, this further detailing of regulations on top of “reporting-to-approval alignment” is not essentially a simple tightening of fees. Rather, it is an institutional upgrade that moves from “fee constraints” to “governance restructuring.” By refining the management of end-to-end expenses such as commissions, bank-insurance agents’ compensation, temporary incentives, and business promotion activities, and by explicitly banning disguised fee payments under names such as “information fees” and “technical service fees,” regulators are, in effect, conducting penetration-style governance over long-existing hidden fee issues and fee spillover problems. The core goal is to break the old “fee-driven growth” model in bank-insurance channels.

Bank-insurance returns to center stage: a game between scale expansion and compliance bottom lines

The backdrop for the added regulatory pressure is that bank-insurance channels are going through a round of strong rebound. In 2025, while growth in individual agency channels for the life insurance industry was sluggish, the bank-insurance channel raised the premium volume of single-premium-to-regular-premium (期交) to 3,973 billion yuan with a 10% double-digit growth rate, reclaiming the No. 1 channel position.

The bank-insurance performance reports of listed insurers are especially eye-catching. China Life’s total bank-insurance premium surpassed one trillion yuan, reaching 110.874 billion yuan, up 45.5%, and new business premium skyrocketed 95.7% year on year. Taikang Life’s bank-insurance scale premium was 61.618 billion yuan, up 46.4%, and new policy regular-premium (期交) premium rose 43.2% year on year. New China Life’s bank-insurance premium income was 72.102 billion yuan, up 39.5%, and first-year regular-premium premium growth for long-term policies rose 29.6%. People’s Insurance Company of China (PICC) Life’s bank-insurance new business value under comparable methodology increased 102.3% year on year, with first-year regular-premium (期交) growth of 66.3%. Ping An Life’s bank-insurance new business value was 9.408 billion yuan, with a year-on-year increase as high as 138%.

However, Zhu Junsheng told this reporter that the bank-insurance channel’s high growth in 2025 does not contradict “reporting-to-approval alignment.” Instead, it reflects a shift in growth logic. The most fundamental driving force comes from changes in residents’ asset allocation demand. In the context of falling interest rate benchmarks, residents’ demand for insurance products that combine stable returns with protection attributes has risen clearly. At the same time, bank channels have a natural advantage in connecting deposit transformations, which forms the underlying support for bank-insurance growth.

“When fees are constrained, growth shifts more toward demand-driven plus capability-driven factors. On one hand, savings-type and annuity-type products match customer needs better. On the other hand, the conversion rate for middle- to high-net-worth customers increases. At the same time, the reduction in fees actually improves the business value rate,” Zhu Junsheng believes. During this process, leading insurers can more easily achieve simultaneous improvement in both scale and value by leveraging comprehensive advantages in product design, channel coordination, and compliance management.

Multiple brokerage research reports continue to be optimistic about the bank-insurance channel. Huayuan Securities analysis suggests that since 2022, the scale of residents’ newly added deposits has increased significantly and the proportion becoming term-based has risen. In 2026, with the need for reinvestment of high-interest assets, funds with lower risk appetite are expected to flow into bank-insurance products with guaranteed or fallback return rates. In addition, with multiple banks停售 five-year term deposits, the scarcity of mid- to long-term locked-in return rates for life insurance products becomes even more prominent.

From a strategic positioning perspective, large life insurers’ attitude toward bank-insurance channels has undergone a fundamental shift. Taikang Life has clearly proposed promoting a “2+N” diversified channel model, putting bank-insurance and individual insurance side by side as two major main channels. Guotai Junan Securities expects that dividend insurance tests long-term investment capabilities; leading insurers have clear advantages. Combined with the downward adjustment of the assumed interest rate and “reporting-to-approval alignment” compressing the room for price wars among small and medium-sized companies, the trend toward concentrated market share in bank-insurance regular-premium new business among the top players is expected to continue.

“Under the joint effect of the relaxation of the ‘one-to-three’ arrangement and the rigid constraints of reporting-to-approval alignment, bank-insurance cooperation is shifting from fee gaming to capability matching,” Zhu Junsheng said. When fee space is compressed, banks no longer compare only the level of service charges. Instead, they pay more attention to insurers’ product competitiveness, service capabilities, and compliance execution ability. This will drive the cooperation relationship toward a more rational and long-term direction.

Zhu Junsheng further pointed out that in this process, the advantages of leading insurers may be further strengthened. On one hand, their fee systems are more standardized and stable. On the other hand, they have stronger capabilities in products and services, enabling them to absorb large-scale customer demand from banks. Therefore, banks are more inclined to deepen cooperation with them, which to a certain extent will compress the space for small and medium-sized insurers. At the same time, however, small and medium-sized insurers can still achieve breakthroughs through regional deep cultivation, featured products, and differentiated services. The industry will present a pattern of “increasing concentration alongside structural divergence.”

For bank-insurance channels to return to center stage is a strategic choice for the life insurance industry in a low interest rate environment. But scale expansion is never the end goal—value growth is the fundamental goal. The “reduce costs and enhance efficiency” that regulators repeatedly emphasize is essentially guiding the industry to get rid of dependence on a fee-driven growth model and return to the origin of insurance protection. It is not hard to predict that as the “Notice” is implemented, compliance thresholds for bank-insurance channels will further increase, and market reshuffling will accelerate.

Editor in charge: Feng Yingzi; Editor-in-chief: Zhang Zhiwei