Regulatory crackdown on banking and insurance! Closing the gray area of "small accounts," the trillion-yuan market is set for reshuffling.

Ask AI · How do new regulations pass through institutional fences to standardize expense management?

Jiemian News reporter | Lü Wenqi

On March 31, Jiemian News learned from insiders that the State Financial Regulatory Administration’s Insurance Personage Insurance Supervision Department’s Life and Health Insurance Regulation Division has continuously issued the Notice on Further Strengthening Fee Management for Bank Agency Channels and related supporting Q&A (hereinafter referred to as the “new regulations”). Based on the 2023 life insurance industry “report-premium and pay-premium as one” framework, the regulator has again stepped up scrutiny of fee management in the bancassurance channel, shifting from reducing visible costs to rectifying the space for hidden expenses.

The target of this round of adjustments is directly the long-standing “off-the-books expenses” problem in the industry. The regulator emphasized that insurers must shoulder full-chain responsibility, from product design to channel execution, and that fee reform in the bancassurance channel has therefore entered a deeper stage of institutional patching.

Stronger Regulation Cracks Down on Hidden Expenses

Looking back at the past two years, “report-premium and pay-premium as one” has driven bancassurance channel commissions noticeably downward. Industry estimates show that the industry-wide average commission level has fallen by about 30% compared with before, and the effect of reducing costs and improving efficiency has already begun to show. However, while “on-the-record” expenses were being compressed, competition in the channel did not cool down. Some expenses began to shift toward “off-the-books,” and the gray space became even more obscure.

Channel expenses that are allowed for compliance purposes are typically called “on-the-book” expenses—namely, the commissions agreed in cooperation agreements between insurers and banks, which are an important source of bank intermediary business income. As for so-called “off-the-book” expenses, they involve providing additional incentives to frontline personnel through cash or disguised benefit transfers. Along with operations such as inflating expenses without basis and misallocating costs, this has gradually evolved into a stubborn industry problem.

A senior executive at a life insurance company told Jiemian News that the business scale of bancassurance channels essentially depends on the利益 allocation mechanism between the insurer and the bank. “The depth of channel cooperation is largely determined by the commission level and the input of comprehensive resources such as deposits and custody. In actual operations, banks tend to choose partners with higher overall returns, while insurers have relatively limited control over the channel.”

Jiemian News has learned that currently, the “on-the-book” channel fees of bank channels are usually between 20% and 40% of the first-year premium. This level is set as a unified price by the head office, but in specific execution, branches often further raise it on top of that baseline. In cooperation among branch institutions in some regions, cases where the actual commission rate is more than 30% higher than the head-office pricing are not uncommon.

Beyond this, the long-standing issue of “off-the-books expenses” in the industry also cannot be ignored. Multiple insiders pointed out that some insurers obtain business by offering additional incentives to bank branches or frontline personnel. These expenses, which are not included in the formal accounts, further raise the actual expense ratio.

As expenses continue to spill over, some businesses’ true costs have clearly deviated from actuarial assumptions, and the risk of losses from differences in fees and expenses has accumulated as well—becoming a key focus of this regulatory crackdown.

These new regulations are precisely aimed at launching a “fine-grained blockade” in this gray area.

From the perspective of expense management, regulators require insurers, when filing bancassurance products, to submit specific line items such as commissions, incentives for bancassurance specialists’ compensation, training and customer service expenses, as well as apportioned fixed expenses separately, and to strictly follow the results of the filing. In other words, each expense must not only be “clearly reported,” but also be “accurately used.” All expenditures must have real, legal, and valid supporting documentation.

At the same time, regulators embed “report-premium and pay-premium as one” into the corporate governance framework, further straightening the responsibility chain. The board of directors must regularly listen to special reports; the general manager is fully responsible for overall work; the chief actuary, the finance负责人, and the channel-segment executives each perform their duties; and the heads of organizations at all levels are directly responsible for execution within their jurisdictions—forming a closed-loop management system from headquarters to the frontline.

In response to the earlier frequent problems involving compensation of bancassurance specialists, the new regulations also provide more operational constraints. The regulator clarified that insurers may not require or imply that specialists use their compensation for business promotion. Expenses advanced for business development must be reimbursed as incurred and uniformly included in training and customer service expenses, and must not be handled in disguise through the guise of compensation. Meanwhile, compensation should in principle be paid out through bank transfers to ensure specialists have independent discretion over their income and to cut off potential pathways for funds to flow back.

In the stages of expense apportionment and business promotion, regulators also fill institutional gaps. Multi-channel joint business development must follow the principle of “who benefits, who bears the cost,” and no mutual shifting of expenses is allowed. Relevant business activities must establish ledger-style records management to ensure traceability throughout the entire process.

To ensure the rollout of the system, regulators also simultaneously strengthen inspection and notification mechanisms. “Report-premium and pay-premium as one” will continue to undergo on-site inspections, and典型违规 cases will be notified to the industry as well, further raising the cost of noncompliance.

Overall, this round of policy upgrades is not just about simply cutting expenses. It is trying to use institutional “fences” to bring long-term expense practices in bancassurance channels that had been operating in gray areas onto a track that can be regulated and traced. The logic of competition, accordingly, is also being recalibrated.

High Growth in Bancassurance and a Clear Matthew Effect

In 2025, amid sustained pressure on individual insurance channels, the bancassurance channel once again became the main growth source for the life insurance industry and returned to the position of the number-one channel.

Jiemian News previously learned from insiders that in 2025, bancassurance channels’ recurring premium (期交保费) overall maintained relatively rapid growth. Although the month-on-month growth rate in the second half of the year slowed somewhat, full-year growth still reached about 10%, and the size of recurring premiums reached RMB 397.3 billion.

Based on data disclosed by listed insurers, the rebound in bancassurance channels has some degree of representativeness. In 2025, Taikang Life’s bancassurance channel achieved scale premium of RMB 61.62B, up 46.4% year over year; of that, the new-coverage recurring premium scale reached RMB 16.9568 billion, up 43.2%. New China Life’s bancassurance channel achieved premium income of RMB 72.1B, up 39.5% year over year; its first-year recurring premium for long-term insurance reached RMB 17.97B, up 29.6%.

In 2025, the new business value of People’s Life’s bancassurance channel was RMB 4.67B; on a comparable basis, it increased 102.3% year over year, and first-year recurring premium increased 66.3% year over year. China Life’s bancassurance channel total premium reached RMB 110.87B, up 45.5% year over year; new policy premium was RMB 58.51B, up 95.7%.

Ping An Life’s bancassurance channel new business value was RMB 9.41B, up 138% year over year. Overall, in terms of the top insurers, their bancassurance channels generally achieved synchronized growth in both scale and value.

Entering 2026, bancassurance channels continued the growth trend from before. Data show that in the first two months of this year, industry recurring premium increased about 21% year over year, achieving a “strong start to the year.” Of this, Ping An Life’s recurring premium income was RMB 15.7 billion, ranking first in the industry; the “old seven” insurers’ combined recurring premium was about RMB 53.0 billion, up 71% year over year.

While the rebound in scale is underway, the industry’s expectations for bancassurance channels are also changing.

At the 2025 annual performance release conference of New China Life, Vice President Wang Lianwen said that in 2026, the bancassurance market will show three trends: first, scale will continue to maintain steady growth; customer demand will continue to differentiate, and coupled with pressure on banks’ non-interest income, bancassurance’s new single premium is expected to continue its growth trend, and signs have already emerged from the performance in the first quarter; second, regulatory and market constraints will be strengthened in parallel. “Report-premium and pay-premium as one” will be further deepened; requirements for protecting consumers’ rights and interests will be enhanced, and banks will face higher demands for the comprehensive service capabilities of partner insurance institutions; third, market differentiation will accelerate and industry concentration will further improve—institutions with asset-liability management capability and professional operating capability will have greater competitive advantages.

In the view of industry insiders, these changes also mean that competition in bancassurance channels is shifting from a pure game of scaling up to a contest of compliance constraints and comprehensive capabilities.