# Bought Insurance for a "Special Medication Card"? Watch Out for Major Losses! Regulators Urgently Halt Related Business, Industry Says Card Benefits Usage Probability Extremely Low, Less Than One in a Million

AI Regulation Calls Stop on Gifted Special Drug Cards: What Market Risks Are Hidden Behind?

Recently, a reporter from Daily Economic News learned from industry sources that the Hubei Regulatory Bureau of the China Banking and Insurance Regulatory Commission issued a notice to local insurance provincial branches. The notice mentioned that some insurance companies have been giving away “special drug cards” and other benefit cards during insurance activities, which may involve providing benefits outside the scope of the insurance contracts to policyholders or insured persons.

As competition in the insurance sales market intensifies, offering a wide variety of value-added services to customers has become an important way for insurance companies to attract and retain clients.

Industry experts point out that “special drug cards” are not formal insurance products. They are often provided by third-party organizations and may involve marketing practices that confuse insurance responsibilities and mislead consumers. Timely regulatory intervention can curb illegal behaviors such as providing benefits outside the contract, resolve disputes and market risks associated with “special drug cards,” and guide insurance companies to operate in compliance.

“Special Drug Cards” Used as Marketing Tools to Attract Customers

Recently, the Hubei Regulatory Bureau of the China Banking and Insurance Regulatory Commission issued a “Notice on Regulating Insurance Business Activities and the Use of ‘Special Drug’ and Similar Benefit Cards” (hereinafter referred to as the “Notice”). During regulatory work, it was found that some insurance companies have been giving away “special drug cards” and other benefit cards to consumers, which may involve benefits outside the insurance contract.

The “Notice” requires all insurance companies within the jurisdiction to conduct self-inspections immediately, thoroughly check whether their branches at all levels are giving away “special drug cards,” “CAR-T cards,” or other benefit cards, and whether they are providing benefits outside the contract. Any such behaviors must be stopped immediately, and efforts should be made to resolve disputes and prevent risks and hidden dangers. Additionally, companies should strengthen internal controls, enhance compliance training, strictly manage personnel and channels, and resolutely prevent the procurement and use of these benefit cards for insurance activities.

“Special drugs” generally refer to high-cost, effective medications used to treat major diseases such as cancer and rare diseases. “CAR-T” is the abbreviation for Chimeric Antigen Receptor T-cell therapy, an emerging immunotherapy that uses the body’s immune system to treat tumors in a personalized manner.

Lung Ge, Deputy Director of the Center for Innovation and Risk Management at the University of International Business and Economics, told Daily Economic News that many insurance institutions use the giveaway of “special drug cards” as a customer management tool to attract and retain clients. The high coverage limits—sometimes tens of thousands of yuan—make these cards highly attractive, reducing the difficulty of acquiring customers and increasing customer stickiness.

However, in practice, the utilization rate of the benefits associated with “special drug cards” is extremely low. The proportion of people who can actually use the related drugs or subsidies for CAR-T therapies is less than one in a million. This is because these drugs are only applicable to major diseases like cancer and rare diseases, which are inherently niche. The combined effect of disease prevalence and actual usage rates of these drugs further reduces the likelihood of benefits being realized.

Many consumers report that some insurance agents promote the free giveaway of “special drug cards” as a core selling point during marketing, claiming coverage for high-priced drugs and CAR-T therapies to attract policyholders. This marketing approach can easily mislead consumers into believing that these drug benefits are an extension of the insurance coverage they purchase, assuming the insurance company will fully cover the costs. Unaware of the actual rules and potential risks of the cards, consumers are often swayed by this “additional benefit” and decide to buy insurance.

Linking Benefit Cards to Insurance Companies Can Lead to Disputes

A search on shopping websites by Daily Economic News found that many third-party organizations are selling “special drug cards.”

For example, a ten-year “special drug card” costs 398 yuan and covers 90 domestic and 30 overseas special drugs. The direct payment limits include 2 million yuan for domestic drugs, 1 million yuan for overseas drugs, and 1.2 million yuan for CAR-T therapies, totaling 4.5 million yuan. Notably, the card’s design includes drug scope, age limits, waiting periods, health disclosures, and direct payment ratios, making it similar in form to insurance products.

The Hunan Regulatory Bureau of the China Banking and Insurance Regulatory Commission stated that providers of “special drug cards” and “CAR-T cards” are third-party organizations that lack the qualification to operate financial services. These products imitate insurance contract terms and payout responsibilities, which can lead to disputes between consumers, third-party organizations, and insurance companies.

By the end of 2024, the Henan Regulatory Bureau had issued a notice to local life insurance branches prohibiting the use of “special drug cards” and similar benefit cards to provide benefits outside the insurance contract. The notice emphasized that these benefit cards are supplied by third-party organizations that are small in scale, weak in strength, and lack financial operation qualifications. Their products mimic insurance terms and payout responsibilities, increasing the risk of disputes.

Lung Ge believes that the regulatory measures taken by various local authorities to stop the illegal gifting of “special drug cards” are part of normal market regulation and orderly maintenance. These “special drug cards” are not formal insurance products nor compliant value-added services signed by insurance companies. They are mostly provided by third-party organizations without insurance company backing and often involve marketing practices that confuse insurance responsibilities and mislead consumers.

In response, the Hubei Regulatory Bureau further clarified that insurance companies must strictly follow regulatory requirements, standardize their operations, strengthen the management of sales personnel, and prohibit giving away benefit cards to consumers during insurance activities. They must not purchase, stockpile, or distribute benefit cards for solicitation, policy issuance, or follow-up visits. During product promotion and explanation, linking benefit cards to insurance companies or misleading consumers into believing that the benefits are provided by the insurer is strictly forbidden. They must also avoid exaggerating insurance responsibilities by mixing benefit card functions such as drug subsidies or expense reimbursements with insurance coverage, which can deceive consumers.

Daily Economic News