Chinese life insurers' cash surrender value rose 12 percent year-on-year to 54.54 billion yuan (US$7.04 billion) in 2006 due to misleading sales promotion and poor company management.

The surrender rate of Chinese life insurance companies stood at 3.44 percent in 2006, 0.34 percentage points less than the previous year. The surrender rate of domestic life insurers was 3.51 percent while it was 1.79 percent in foreign-funded firms.

Cash surrender value is the amount available in cash upon the cancellation of an insurance policy, usually a whole life policy, before it becomes payable upon death or maturity. Surrender rate refers to policies that are terminated because of surrender.

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The full text is available in the February Issue of China Insurance.

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