Core Viewpoint - The new regulations on universal life insurance (ULI) aim to enhance supervision and address deep-rooted issues in the market, allowing for dynamic adjustment of minimum guaranteed interest rates and prohibiting products with terms shorter than five years [2][3][4]. Group 1: Regulatory Changes - The National Financial Supervision Administration has issued a notification that allows for dynamic adjustments to the minimum guaranteed interest rates of ULI products, effective from May 1, 2025 [2][4]. - The notification prohibits the development of ULI products with terms shorter than five years and encourages insurance companies to extend the actual duration of policies through reasonable adjustments to surrender fees and policy bonuses [3][4]. - Insurance companies are required to strengthen liquidity management of ULI accounts and strictly control the risks associated with mismatched funding and terms [2][3]. Group 2: Sales and Marketing Regulations - The notification mandates insurance companies to enhance the classification and suitability management of sales personnel to prevent misleading sales practices [3][4]. - A negative list of sales behaviors is to be established, prohibiting the use of terms like "interest" and "expected returns" in marketing, and ensuring that the insurance protection attributes are not downplayed [3][4]. Group 3: Historical Context and Market Trends - ULI products were once highly favored due to their high guaranteed returns, with some products offering rates as high as 6%-8% between 2014 and 2017, significantly outperforming traditional bank products [5][6]. - The rapid growth of ULI premiums peaked in 2016, accounting for 34% of total premiums in the life insurance sector, but this growth has since declined due to regulatory tightening and market adjustments [6][7]. - In 2024, the new premiums for ULI products decreased by 2.8% year-on-year, indicating a cooling market [7]. Group 4: Future Outlook - The new regulations are expected to lead to a significant transformation in the ULI market, with a potential shift from short-term investment tools to long-term protection products, focusing on needs such as retirement and education funding [8][9]. - Industry insiders predict that insurance companies may lower settlement rates further or develop hybrid products that combine protection with light investment features [9].