China Cracks Down On Online Insurance Companies

A China regulatory watchdog group has turned its focus to its insurance technology platforms as the banking and insurance watchdog continues its crack down on businesses in several vertical markets, reported PYMNTS.

The regulatory group’s latest order says insurance companies and local agencies must stop improper marketing and pricing practices and strengthen user privacy protection. Companies must address these issues or face “severe punishment,” according to a report.

Online insurance had been expected to grow into a 2.5 trillion yuan ($385 billion) industry within the next 10 years, according to Bloomberg. By the end of 2020, more than 140 Chinese insurance companies had launched online businesses, with total premiums of 298 billion yuan ($45 billion) for the year, a China Banking and Insurance Regulatory Commission (CBIRC) official said in a May speech.

Private equity and venture capital companies are redirecting their strategies from tech industries that are subject to intense scrutiny and sudden changes in regulations, according to a Reuters report on Monday (Aug. 9).

A recent wave of crackdowns by various Chinese agencies, starting with the halting of Ant Group’s IPO, triggered new laws, big fines and plenty of uncertainty and fear.

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