Regulators are once again establishing strict rules for the banking and insurance channels: incorporating "bank reporting and insurance reporting" compliance management into internal assessment and accountability mechanisms.

The reporter from Daily Economic News｜Yuan Yuan The editor from Daily Economic News｜Liao Dan

As the bank-insurance (bank distribution) channel moves into a “fast lane,” regulators have also begun to call a stop to the early hints of noncompliant sales practices it has been showing.

On March 30, a reporter from Daily Economic News learned from industry insiders that, to fully implement the requirements of the Notice on Matters Concerning Regulating the Business of Bank Agency Channels for Personal Insurance Companies, and to further落实 the “reporting and paying in unison” (报行合一) management responsibilities of the bank agency channels of insurance companies, to standardize market order, and to continuously advance cost reduction and efficiency improvements, the Personal Insurance Regulatory Division of the National Financial Regulatory Administration recently issued the Notice on Further Strengthening the Fee Management of Bank Agency Channels (hereinafter referred to as the “Notice”).

It must not require or imply that bank-insurance specialists use their compensation for business development

So-called “reporting and paying in unison” means that, when an insurance company actually sells products, the payment standards for fees (commissions, etc.) must be exactly the same as the standards submitted when the products were filed with regulators in the first place.

In 2023, the National Financial Regulatory Administration issued the Notice on Regulating Bank Agency Channel Insurance Products, imposing constraints on commissions in the bank-insurance channel. At the same time, regulators loosened the restriction on the “1+3” bank sales outlets (meaning that each commercial bank outlet, within the same accounting year, may cooperate in insurance agency business with no more than three insurance companies) and also clarified the commission standards for bank agency business.

Driven by policy and market developments, business growth in the bank-insurance channel has entered a fast lane. According to data, in 2025, bank-insurance installment premium payments in the life insurance industry increased year over year by 10%. While it is developing rapidly, the bank-insurance channel has also exposed some problems. For this reason, the National Financial Regulatory Administration issued the Notice to further set rules again for the bank-insurance channel.

The Notice requires that, when insurance companies file for record bank agency channel product submissions, they must, according to the requirements of the intelligent product checking system for personal insurance products, separately report the levels for commissions paid to banks, remuneration incentive payments for bank-insurance specialists, training and customer service fees, allocated fixed expenses, and more. When insurance companies carry out business in the bank agency channel, they must implement the expense policy according to the actuarial report of the product that has been filed for record. When expenses are incurred, insurance companies must obtain genuine, legal, and effective supporting documents.

Insurance companies must strengthen the authenticity, compliance, and refined management of expenses, and incorporate “reporting and paying in unison” compliance management into internal performance appraisal and accountability mechanisms. At least once every year, the board of directors of an insurance company must hold a special session to hear reports on “reporting and paying in unison.” In addition, the Notice also clarifies relevant responsibilities for the general manager, the person in charge of finance, the chief actuary, and other senior management personnel responsible for the bank agency channels, among others.

The Notice also attaches the Bank Agency Channel Fee Management Matters: Questions and Answers (I) (hereinafter referred to as the “Questions and Answers”), which provides explanations on issues including how insurance companies should pay commission expenses, how to strengthen the management of remuneration incentives for bank-insurance specialists, and how to formulate and manage temporary incentive plans.

Regarding the strengthening of remuneration incentive management for bank-insurance specialists, the Questions and Answers clarify that the compensation structure and level of bank-insurance specialists must meet the requirements of management rules, and must be consistent with their job responsibilities, work content, and performance results in bank agency channel positions. Insurance companies must effectively safeguard the legitimate rights and interests of bank-insurance specialists. In principle, compensation should be paid by bank transfer. Insurance companies must, by appropriate means, ensure that bank-insurance specialists are informed that the relevant compensation has no specified purpose and that they may dispose of it at their discretion.

Regarding business promotion activity management, the Questions and Answers clarify that organizations at all levels of insurance companies must implement ledger management for business promotion activities, recording information such as time, location, organizations, and personnel item by item, and attaching relevant supporting documents. Insurance companies must pay various expenses in accordance with regulations such as financial and accounting discipline, obtain genuine, legal, and effective supporting documents, and include business promotion activity expenses in training and customer service fees. Insurance companies may not require or imply that bank-insurance specialists use their compensation to carry out business promotion activities. Insurance companies must, based on the facts, list expenses advanced by bank-insurance specialists for providing bank agency channel services, and include them in training and customer service fees, and may not distribute the relevant amounts under the name of bank-insurance specialists’ compensation.

Industry: Competition landscape in the bank-insurance channel will accelerate differentiation

To ensure that insurance institutions strictly implement the requirements of “reporting and paying in unison,” the Notice requires that each financial regulatory bureau continues to conduct on-site inspections of “reporting and paying in unison,” and establish an industry notification mechanism for “reporting and paying in unison” violations and typical cases, so that relevant information is timely reported to the head insurance company and its legal-person regulatory departments.

“After the Notice is issued, it becomes increasingly difficult to compete on fees in the bank-insurance channel. Basically, all the room for maneuver has been blocked.” One industry insider, when discussing with a reporter from Daily Economic News, said.

After the Notice is issued, “small account” issues will be effectively curbed. This is good news for the industry, because the decline in costs will reduce the impact of spread loss on operations.

A reporter from Daily Economic News noted that, currently, the bank-insurance channel exhibits a polarized pattern. The market share of leading institutions dominated by the “Big Seven” life insurance players is gradually increasing, while premium growth through the bank-insurance channel of small and mid-sized insurance companies and some bank-affiliated insurance companies is lagging, and market resources are accelerating in their concentration toward leading players.

And industry insiders believe this trend will further intensify. Wang Lianwen, Vice President of New China Life, said at the company’s 2025 performance release conference that, looking ahead to 2026, the China bank-insurance market will show three changes.

Specifically, first, overall scale and totals will grow steadily; customer demand will continue to diversify; demand for bank fee-based income will become more rigid; and new premium for bank-insurance business is expected to show steady growth, with the market performance in the first quarter already showing a positive trend.

Second, requirements from multiple parties will significantly increase. As the “reporting and paying in unison” policy is pushed deeper, the protection mechanism for consumers’ rights and interests will continue to improve. Banks will also have higher expectations for the comprehensive business operation and service capabilities of their cooperation partners. The industry needs to seek development in compliance and create value in development.

Finally, the market structure will accelerate its differentiation, and the industry will evolve toward an oligopoly structure. The Matthew effect will become more pronounced, and the “the strong will always stay strong” characteristic will be evident. Insurance companies with higher levels of specialization and stronger asset-and-liability management capabilities will seize early market opportunities.

CII Credit Information Services International analysis says that in terms of channel structure, in 2026, there will be a pattern of “individual insurance dominating, bank-insurance increasing volume, and intermediaries accelerating reshuffling.” Considering that the product structure is mainly savings-oriented and is not expected to change in the short term, and given that the bank-insurance channel naturally fits scenarios for selling wealth-management-type insurance products, it is expected that life insurance companies in 2026 will continue to increase their investment in the bank-insurance channel. The premium contribution from the agent channel will further decline. At the same time, under the backdrop of “reporting and paying in unison,” the survival space of intermediary companies (经代) will be squeezed, and it is expected that some small and mid-sized intermediary companies will accelerate liquidation and exit. The premium contribution from the intermediary channel is also expected to continue declining.

Cover image source: AIGC