BEIJING, May 17 (Xinhua) -- China's banking and insurance regulator decided to pilot exclusive commercial pension insurance in east China's Zhejiang and southwest China's Chongqing for one year from June 1, reported Xinhua-run Xinhua Finance Monday.
According to an announcement released by China Banking and Insurance Regulatory Commission (CBIRC), the sector watchdog, on May 15, the exclusive commercial pension insurance business will be piloted by six large life insurance firms, namely PICC Life Insurance Co., Ltd., China Life Insurance Co., Ltd., Taiping Life Insurance Co., Ltd., China Pacific Life Insurance Co., Ltd., Taikang Life Insurance Co., Ltd. and New China Life Insurance Co., Ltd. (601336.SH).
According to CBIRC's announcement, the six life insurers are required to develop exclusive commercial pension insurance products characterized by convenient policy purchasing, flexible premium payment and stable returns, with the future pension payment lasting for no less than 10 years and available to policy buyers after their reaching the age of 60.
The six life insurers are also required to explore services to satisfy old-age care need of employees in new industries and new businesses and the flexible employment as well. Internal management mechanism including long-term sales incentive evaluation mechanism, risk control mechanism and relatively long-term investment evaluation mechanism are required to be set up to adapt to the long-term development of the exclusive commercial pension insurance business of six.
Under the premise of effective risk isolation, CBIRC encouraged the six life insurers to align development of exclusive commercial pension insurance business with old-age care and nursing care services to gratify diversified old-age care demand.
As a part of the third-pillar pension insurance, the exclusive commercial pension insurance pilot is helpful to enrich the third-pillar pension insurance product supply and enhance the multi-layer and multi-pillar pension insurance system in China, said a department head with CBIRC.
Previously in March, China proposed for the first time in the 2021 government work report to regulate and develop third-pillar pension insurance.
Generally, a three-pillar pension insurance system is composed of basic pension system as the first pillar, corporate pension and occupational pension as the second pillar, and personal savings-based pension insurance and commercial pension insurance as the third pillar.
Development of the third-pillar pension insurance sector is linked with a country's economic development level, people's financial consumption habits, expected life span, old-aging degree and the birth rate, reported People.cn quoting Xiao Yuanqi, deputy head with the CBIRC on a sub-forum of the 2021 annual conference of the Boao Forum for Asia (BFA).
Under such circumstances, China's third-pillar pension insurance sector accounts for a relatively low proportion in the entire pension insurance system at present, added Xiao. (Edited by Duan Jing with Xinhua Silk Road, firstname.lastname@example.org)