The Chinese government has recently announced a new regulation governing the supervision of the insurance industry, with several key provisions taking effect from November 1, 2025. Motor insurance is excluded from the new regulation.
Among these, the introduction of the “Cash Before Cover” requirement will have a particularly significant impact on day-to-day operations for both insurers and brokers engaged in international insurance placements.
The regulation is valid for mainland China, not for the Hong Kong or Macao SARs. According to the current information the regulation applies to both purely local policies and international insurance business.
Key Regulatory Changes
- Cash Before Cover Requirement
Under the new rule, insurance premiums must be received by the insurer before any policy is formally issued. In other words, coverage may only commence after payment has been made and acknowledged. - Fapiao (Official Invoice)
A Fapiao (official tax invoice) may only be issued after the premium payment has been received. This means the insured must make payment upon receipt of the debit note before a policy can be released. - Policy Wordings and Special Agreements
All policy wordings, clauses, and special agreements must be pre-approved by the regulator. Unapproved wording may not be used for quotation, binding, or issuance.
How to Proceed
- Renew policies “as expiring” and ensure the renewal premium is paid before the renewal date.
- Once the policy is officially issued following receipt of the premium, endorsement can be arranged to update or amend coverage terms and conditions as needed.
Detailed Payment Rules
- Premium and insurance tax must be paid before issuance.
- Policies under CNY 200,000 cannot be paid in installments.
- Policies of CNY 200,000 or more may be paid in installments (first installment ≥ 25%).
- Up to 4 installments are allowed for 1-year policies;
multi-year policies may add 2 installments per additional year.
Advisory from Insurers
Ping An, a major fronting partner for global insurers, advises that if renewal is not confirmed before November 1, 2025, the new rule will apply.
Clients will need to pay the premium first, after which the insurer will issue the Fapiao and policy.
Brokers will issue a debit note as the payment request.
Advisory from TRC
The regulation has just been announced and some details remain under clarification.
Insurers must now determine whether to:
- allow limited back-dating after payment, or
- apply a strict “cash-before-cover” policy.
We will continue to monitor developments closely and advise our clients on the appropriate process for renewals and new business placements after November 1, 2025
