China acts tough on insurance industry violations

BEIJING - Chinese regulators have taken a tough stance against violations in the insurance industry, meting out millions of dollars in fines in the first four months of 2018.

Over 60 insurance institutions received a total of more than 63 million yuan (about $9.8 million) in penalties in the January-April period, the Securities Daily reported, citing incomplete statistics.

Both insurance firms and intermediary agencies were fined for irregularities, including misguiding sales pitches and fake materials, according to the newspaper.

For property insurers, fiscal data fraud was the most frequent illegal practice, while car insurance and agricultural insurance were areas that saw heavy penalties.

China announced a merger of the banking and insurance regulators in March in an effort to step up scrutiny over the financial sector to defuse risks. The newly merged regulator was officially unveiled last month.

In the first quarter of the year, banking and insurance institutions received 646 penalties for violations including defective corporate governance and breaches of macro-regulation policies, according to data from the China Banking and Insurance Regulatory Commission. They were handed fines and confiscation orders worth about 1.2 billion yuan (about $187 million).