Insurers in China will be banned from including survival benefits in their medical and disease insurance policies from September in a newly released regulation as the regulator boosts efforts to clear up the health insurance sector.

 

When selling policies to protect against losses caused by medical bills and diseases, insurers can't include the survival benefits, the China Insurance Regulatory Commission said on its Website yesterday.

 

The new rules, which the industry has been expecting for about a year, will be effective from September 1. They were passed on June 12.

 

Industry insiders said the move is aimed at segmentation of the health insurance sector - health insurance policies are mainly to protect against health related losses. Survival benefits, usually in monetary terms, are what insurers promise to return to policy holders if they survive the maturity date of the policy. Investment-related life policies usually have survival benefits.

 

The new rules also stipulate that when insurers are selling health policies as an appended product to a main policy (for instance a life policy), the effective term of the health policy shall be at least as long as that of the main policy.

 

The latest move is aimed at protecting policy holders who have complained about getting no compensation from insurance companies.

 

(Shanghai Daily August 15, 2006)