Can style trump substance? Not when it comes to the business of insurance, according to new regulations issued by the China Insurance Regulatory Commission (CIRC).
The Financial Times reports that China’s insurance regulator has banned “exotic” insurance products as part of a broader push to restrict the sale of non-traditional products.
The new regulations cover products “where the insured event will not result in any loss to the customer” and “products with no real content, where the purpose of the product is for creating marketing hype.”
Smog insurance, overtime insurance that pays out if the insured is at the office after 9pm, and so-called gourmets’ insurance that provides cover against indigestion are among the non-traditional products now banned by China’s regulator.
Insurers have sometimes used these exotic products as promotional tools, with attention-grabbing advertisements that aim to go viral, the FT reports.
The new regulations come one month after the CIRC cracked down on insurers that sell short term investments called universal insurance products, proceeds of which were used to fund acquisitions.
CIRC chairman Liu Shiyu warned insurers not to become “barbarians” and “robbers” by aggressively acquiring companies in leveraged buyouts.
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