PICC(SH:601319) Zhong Guo Jing Ying Bao·2025-10-15 11:18Core Viewpoint - The National Financial Regulatory Administration is set to implement a new regulation for non-auto insurance, focusing on improving the quality of non-auto insurance business and addressing issues such as irregular operations and irrational competition, effective from November 1, 2025 [2][3]. Group 1: Regulatory Changes - The new regulation aims to optimize assessment mechanisms, standardize product development and usage, manage premium income, enhance market supervision, and improve underwriting and claims services in the non-auto insurance sector [2]. - The regulation mandates that property insurance companies must adhere to principles of fairness, reasonableness, and adequacy in determining insurance rates, and must not set excessive fees that do not correspond to the services provided [3][4]. Group 2: Industry Response - Major insurance companies, including China Life Insurance, Ping An Property & Casualty, and Taiping Property Insurance, have established dedicated teams to implement the new regulatory requirements [2][6]. - The implementation of the "reporting and operation integration" policy is expected to curb irrational price competition and promote rational market behavior, leading to healthier industry development [5][7]. Group 3: Financial Performance and Challenges - Non-auto insurance has seen its share of total premium income rise from 26%-27% between 2013 and 2016 to over 50% currently, but profitability remains weaker compared to auto insurance [3]. - The regulation addresses issues such as high expense levels, underwriting losses, and high receivable premium rates that have emerged with the rapid expansion of non-auto insurance business [3][4]. Group 4: Implementation Strategies - Companies are required to adopt a "fee upon issuance" policy, ensuring that premiums are collected before issuing policies to mitigate receivable premium issues [4]. - The regulation emphasizes the need for insurance companies to enhance their internal controls and information systems to manage premium receivables effectively [4][6].