On October 23, the National Financial Regulatory Administration of China announced a directive titled “Notice on Vigorously Developing Commercial Insurance Annuities” aimed at expanding the pilot programs for commercial pension services.
The term “commercial insurance annuity” refers to products developed by commercial insurance companies that provide features such as retirement risk management and stable long-term asset accumulation. This includes annuity insurance and whole life insurance with terms of five years or more, designed to meet the needs of retirement security, as well as commercial pensions and other products recognized by the agency.
The notice emphasizes the importance of promoting various types of retirement annuity insurance. Insurance companies are encouraged to enhance their role in providing supplementary retirement security by continuously improving their clients’ lifecycle retirement risk assessments and pension planning services. They should also diversify the ways and timelines for receiving annuities, and ensure a seamless integration with basic retirement insurance, contributing to a multi-tiered pension system. A key focus is on developing products and services that offer long-term payout options and addressing individuals’ needs for pension conversion and withdrawals.
Since January 1, 2023, pilot programs for commercial pension services have been launched in Beijing and nine other provinces and cities. The new notice specifies that, following the principle of “one successful case leads to another,” more qualifying pension insurance companies will be supported to join the business. Based on the experiences from these pilots, the notice aims to extend the trial period and expand the regions involved. Pension insurance companies are advised to focus on customer retirement needs, enhance product offerings, optimize business processes, and improve the overall customer experience.
Additionally, the notice mentions that insurance companies should adhere to long-term, value-oriented, and stable investment strategies to support capital market development while increasing investments in industries related to the aging economy. They are encouraged to explore asset allocation methods that meet the management needs of commercial insurance annuities, strengthen asset-liability management, and actively participate in the construction of new infrastructure and major projects to support the advancement of new productive forces.
