Overview
On Oct 9, the National Financial Regulatory Administration (NFRA) revised and released the “Rules on Property Insurance Company Insurance Product Development” (the Rules), comprising 8 chapters and 41 articles and taking effect on Nov 1, 2026, replacing the 2017 guidelines. As a key measure in property-insurance regulation and non-auto comprehensive governance, the Rules systematically upgrade the full-lifecycle product supervision and sustain a strong-supervision signal.
Background & Interpretation
1. Regulatory and Industry Context
As the property-insurance market grew rapidly, coverage expanded but problems emerged: high rider share without detailed rules, weak management of industry model clauses and pure-risk loss rates, and unclear standards for product review, revision and deregistration. Based on broad research and consultation, the Rules systematically revise the old guidelines to give the industry clear, standards-based guidance.
2. Core Drivers and Underlying Mechanism
The Rules list eight banned product types: no insurable interest, no actual loss, certain or impossible contingencies, speculative-risk coverage, no real coverage merely for speculation, promises of premium rebates for no-claim, risk-bearing without charging premium, and other violations. The most significant change is a dedicated chapter on riders, listing five types that should, in principle, not be developed (e.g., inconsistent policyholders with the main policy, used to correct main-policy errors, weak relevance to the main policy), and requiring firms to assess rider necessity—steering the industry back to riders as genuine supplements.
3. Market Structure and Value-Chain Impact
The Rules tighten corporate accountability: firms must establish a product-management committee led by the principal responsible person, covering planning, deliberation, review and filing; for products with over 5% of current written premium, assessment is required at least semi-annually within two years of launch. This pushes the industry from “expense competition” to “value competition,” accelerating cleanup of low-quality products and preventing clause conflicts, claim disputes and compliance risk.
Implications & Outlook
Short-term, the industry will concentrate on clearing non-compliant products; medium-term, product standardization and pricing scientification improve, with stricter use of model clauses and benchmark loss rates. Consumer protection (plain-language clauses, prominent exclusion prompts) becomes a hard constraint, easing information asymmetry.
Takeaways for Industry Participants
- Property insurers should promptly review products and build compliance and committee structures;
- Intermediaries must update sales scripts and disclosures and strengthen suitability;
- Consumers can expect more transparent products and enforceable right-to-know.
This column compiles industry information and shares technical perspectives; it does not constitute investment advice.