Overview
In 2026 C-ROSS Phase II is fully enforced: rules raise risk factors for unlisted equities and real estate and cap the share of future earnings counted into core capital (only policies with >=10-year residual term, and no more than 35% of core capital), squeezing smaller insurers. Meanwhile, “Bao-Xing-He-Yi” (file-vs-actual consistency) is extended from auto and bancassurance to all non-auto lines.
Background & Interpretation
1. Regulatory and Industry Context
At the Sept 10 “15th Plan” press conference, regulators pledged to curb “price wars”, illegal rebates and “high-interest high-rebate” practices, rolling out file-vs-actual consistency and comprehensive non-auto governance. Q2 average comprehensive solvency was 180.6% (property 247.0%, life 169.7%) but internal divergence is widening.
2. Core Drivers and Mechanism
Phase II hardens the “calculate capital before doing business” constraint via finer risk metrics; file-vs-actual consistency compresses fee arbitrage and恶性 price competition, pushing insurers from scale to quality. With low rates and rising equity allocation, capital-consumption management becomes central.
3. Market Structure and Impact
Some smaller insurers approach key review thresholds and urgently need capital; the sector shifts from fee/channel wars to pricing, risk selection and service. AI is accelerating: China Life 500+ agents, Taikang’s four-layer architecture, PICC’s “AI Fu An Kang”, and a June regulator guideline on AI safety (32 requirements).
Implications & Outlook
Near term, fee rates and price wars are constrained, making cost structures more transparent. Mid term, compliance and operating pressure rise for smaller insurers; differentiated “capital-aware” management is the way out. Watch insurance-law revision, dividend-realisation transparency and capital-instrument supply.
Takeaways for Industry Participants
Insurers: build capital-charge-aware product and channel strategies; grow low-charge lines like participating pensions. Agents/channels: drop rebate arbitrage, move to professional service. Policyholders: cleaner fees and clearer pricing benefit consumers long term.
This column compiles industry information and shares technical perspectives; it does not constitute investment advice.