Core Viewpoint - The National Financial Regulatory Administration has released guidelines to promote the high-quality development of health insurance, emphasizing the conversion of life insurance benefits into long-term care insurance payments for insured individuals facing disability [1][3]. Group 1: Development of Long-term Care Insurance - The guidelines outline a strategic approach and phased goals for the development of health insurance, particularly focusing on the conversion of life insurance benefits into long-term care insurance [1][3]. - The pilot program for the conversion of life insurance to long-term care insurance has been ongoing since May 1, 2023, with a two-year trial period, allowing life insurance companies to participate [3][4]. - Long-term care insurance is designed to cover the basic living and medical care costs for individuals with long-term disabilities, representing a proactive measure against population aging [3][4]. Group 2: Current Market Situation - Major insurance companies, including China Life, Ping An, Taikang, and PICC, have started to disclose information about convertible products on their websites, with PICC offering the most convertible products [4]. - The conversion process requires specific conditions, such as the policy being in effect for at least two years and the insured reaching a certain age and health status [4][5]. - Despite some growth in business volume during the pilot phase, the overall market impact remains limited, with consumer awareness and acceptance of the conversion business needing improvement [5][6]. Group 3: Opportunities and Challenges - The release of the guidelines presents new opportunities for insurance companies, including expanding business scope, enhancing customer loyalty, and optimizing business structures [6][7]. - Challenges include difficulties in risk assessment due to a lack of standardized criteria for determining disability and care needs, insufficient supply of care services, and data accumulation issues [6][7]. - The guidelines suggest establishing a standardized evaluation system for disability levels and care services, as well as promoting collaboration with healthcare and nursing institutions [7].

Core Viewpoint - The recent policy initiative aims to accelerate the implementation of the conversion of life insurance liabilities to long-term care insurance liabilities, addressing the growing demand for long-term care services due to an aging population in China [1][2]. Group 1: Policy and Regulatory Framework - The Financial Regulatory Authority has issued guidelines to fully develop the conversion business between life insurance and long-term care insurance, allowing insured individuals to convert life insurance payouts into long-term care expenses when they become disabled [1][2]. - The pilot program for this conversion has been in place for two years, with a formal rollout starting on May 1, 2023, allowing all life insurance companies to participate [1]. Group 2: Market Dynamics and Challenges - Several insurance companies, including China Life, Taiping Life, and Ping An Life, have begun to disclose information about eligible life insurance products for conversion on their websites, although the number of companies actively participating remains limited [2]. - Challenges for insurance companies include the complexity of actuarial calculations, high system modification requirements, and a lack of immediate premium contribution, leading to insufficient internal motivation to pursue this business [2][3]. Group 3: Market Opportunities - The conversion business presents an opportunity to activate a large existing life insurance market and innovate insurance service formats, meeting the health protection needs of residents throughout their life cycle [3]. - The dual mechanism of "policy discounting" and "actuarial equivalence" allows for flexible conversion options, catering to both insured individuals in care and those in good health [3]. Group 4: Future Directions for the Industry - Industry experts suggest that insurance companies should enhance their professional capabilities, optimize product designs, and leverage technology to improve underwriting and claims processes [3]. - Establishing long-term partnerships with organizations providing long-term care services is also recommended to integrate these services into the insurance company's health and elderly care ecosystem [3].