Regulators are once again setting rules for banking and insurance business

As the insurance and banking (bancassurance) channel business speeds onto the “fast lane,” regulators have also begun to take action against the emerging signals of noncompliant sales practices.

On March 30, reporters from The Daily Economic News learned from industry insiders that, to thoroughly implement the requirements of the “Notice on Matters Concerning the Bancassurance Channel Business of Personal Insurance Companies,” further fulfill insurance companies’ “fee-for-sales aligned reporting and payout” (“report-to-bank, pay-as-reported,” i.e.,报行合一) management responsibilities for bancassurance channels, standardize market order, and continuously promote cost reduction and efficiency gains, the Personal Insurance Supervision Department of the National Financial Regulatory Administration recently issued the “Notice on Further Strengthening Fee Management for Bancassurance Channels” (hereinafter referred to as the “Notice”).

Do not require or imply that bancassurance specialists use their compensation for business development

The so-called “fee-for-sales aligned reporting and payout” (“report-to-bank, pay-as-reported,” 报行合一) means that when an insurance company actually sells products, the standards for paying the product-related handling fee (commission, etc.) must be completely consistent with the standards submitted to regulatory authorities when the products were initially filed.

In 2023, the National Financial Regulatory Administration issued the “Notice on Regulating Insurance Products in Bank Agency Channels,” which constrained commissions in the bank insurance channel. At the same time, regulators also removed the “1+3” restriction on bank sales outlets (i.e., within the same fiscal year, each bank branch can only cooperate with no more than 3 insurance companies for insurance agency business) and clarified the commission standards for bank agency business.

Driven by policies and market forces, bancassurance channel business development has entered the fast lane. Data shows that in 2025, industry personal insurance bancassurance installment premium (期缴保费) increased year over year by 10%. While the sector is developing rapidly, some issues have also emerged in bancassurance channel business. For this reason, the National Financial Regulatory Administration issued the “Notice,” setting new rules again for bancassurance channel business.

The “Notice” requires that when insurance companies submit product filings for bancassurance channel products, they must, in accordance with the requirements of the personal insurance product intelligent review and validation system, separately report levels such as the commissions paid to banks, the salary and incentive compensation of bancassurance specialists, training and customer service fees, and allocated fixed expenses. When insurance companies carry out bancassurance channel business, they must implement the fee policies according to the filed actuarial report for the products. If any expense is incurred, the company must obtain real, lawful, and effective documentation as evidence.

Insurance companies must strengthen the authenticity, compliance, and fine-grained management of expenses, and incorporate “fee-for-sales aligned reporting and payout” compliance management into internal performance evaluation and accountability mechanisms. At least once every year, the board of directors of an insurance company must hold a special session to hear a report on the status of “fee-for-sales aligned reporting and payout.” In addition, the “Notice” also clarifies related responsibilities for the general manager, the person in charge of finance, the chief actuary, senior management personnel overseeing bancassurance channels, and other personnel concerning “fee-for-sales aligned reporting and payout” work.

The “Notice” also comes with the “Q&A on Matters Concerning Fee Management for Bank Agency Channels (I)” (hereinafter referred to as the “Q&A”), which answers questions such as how insurance companies should pay commission expenses, how to strengthen management of salary and incentive compensation for bancassurance specialists, and how to formulate temporary incentive plans.

In strengthening management of salary and incentive compensation for bancassurance specialists, the “Q&A” specifies that the compensation structure and level of bancassurance specialists must meet the requirements of the management system and be commensurate with their job responsibilities, work content, and performance in their bancassurance channel roles. Insurance companies must effectively protect the legitimate rights and interests of bancassurance specialists; in principle, compensation should be paid via bank transfer. Insurance companies must, in an appropriate manner, ensure that bancassurance specialists are aware that the relevant compensation has no designated use and can be independently disposed of.

Regarding business promotion activity management, the “Q&A” specifies that all levels of institutions of insurance companies must implement ledger management for business promotion activities, recording information such as time, location, institution, personnel, etc. for each item, and attaching the relevant supporting documents. Insurance companies must pay various fees in accordance with regulations such as financial and accounting discipline, obtain real, lawful, and effective documentation, and include business promotion activity expenses in training and customer service fees. Insurance companies may not require or imply that bancassurance specialists use their compensation to carry out business promotion activities. Insurance companies must allocate and expense, truthfully, the fees they advance for bancassurance specialists to provide services in the bancassurance channel, and include such amounts in training and customer service fees, and may not pay the relevant funds under the name of compensation for bancassurance specialists.

Industry insiders: The market structure of bancassurance business will accelerate its split

To ensure insurance institutions strictly implement the “fee-for-sales aligned reporting and payout” requirements, the “Notice” clarifies that each financial regulatory bureau continues to conduct on-site inspections on “fee-for-sales aligned reporting and payout,” and has established an industry-wide notification mechanism for “fee-for-sales aligned reporting and payout” violations and typical cases, so that it can promptly inform the insurance group’s head company and the supervision departments of its legal-person institutions of the relevant situation.

“The release of the ‘Notice’ makes it increasingly difficult to compete on the fees in bancassurance channel business, and the space for maneuvering is basically gone.” An industry insider, speaking with reporters from The Daily Economic News, said.

After the “Notice” was issued, the “small-account” problem will be effectively curbed. This is good news for the industry because the decline in costs will reduce the impact of margin losses on operations.

Reporters from The Daily Economic News noted that, currently, bancassurance channel business shows a bipolar-divergence pattern. The share of business of leading institutions centered on the “Big Seven” life insurers is gradually increasing, while mid- and small-sized insurance enterprises and some bank-affiliated insurance firms see insufficient growth in bancassurance premium, and market resources are accelerating their concentration toward leading players.

And industry insiders believe this trend will continue to intensify. At the 2025 results release conference, Wang Lianwen, vice president of New China Life Insurance, said that looking ahead to 2026, China’s banking and insurance market will show changes in three areas.

First, overall scale will grow steadily, customer demand will continue to diversify, banks’ demand for fee-based net income (中收) will become more rigid, bancassurance new business premium is expected to show steady growth, and the market performance in the first quarter has already shown a positive trend.

Second, requirements from multiple parties will significantly increase. The “fee-for-sales aligned reporting and payout” policy will be pushed deeper, mechanisms for protecting consumers’ rights and interests will be continuously improved, and banks will have higher expectations for partner comprehensive operating and service capabilities. The industry needs to seek development in compliance and create value in development.

Finally, the market structure will accelerate its split. The industry will evolve toward an oligopoly structure, the Matthew effect will become even more prominent, strong players will continue to strengthen, and insurers with high specialization and strong asset-and-liability management capabilities will seize the first-mover advantage in the market.

Cixin Credit Information Service analysis says that in terms of channel structure, in 2026 the pattern will be “individual life insurance-led, bancassurance increasing volume, and intermediaries accelerating shuffling.” Considering that the product mix is currently dominated by savings-type products, and is not expected to change in the near term, and given that bancassurance channels naturally have scenarios for selling wealth-management-type insurance products, it is expected that in 2026 personal insurance companies will continue to increase their investment in bancassurance channels. The contribution of premium from agency agent channels (代理人渠道) will further decline. Meanwhile, under the background of “fee-for-sales aligned reporting and payout,” survival space for agency-and-distribution (经代) companies will be squeezed, and it is expected that some mid- and small-sized agency-and-distribution firms will accelerate their market exit; the contribution of premium from the agency-and-distribution channel will continue to decline.

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Editor in charge: Cao Ruitong