{"id":15933,"date":"2025-11-05T13:49:14","date_gmt":"2025-11-05T12:49:14","guid":{"rendered":"https:\/\/trustrc.com\/?p=15933"},"modified":"2025-11-05T13:49:14","modified_gmt":"2025-11-05T12:49:14","slug":"china-implementation-of-the-new-cash-before-cover-regulation-on-november-1-2025","status":"publish","type":"post","link":"https:\/\/trustrc.com\/en\/china-implementation-of-the-new-cash-before-cover-regulation-on-november-1-2025\/","title":{"rendered":"China: Implementation of the new \u201cCash Before Cover\u201d regulation on November 1, 2025"},"content":{"rendered":"

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.<\/p>\n

Among these, the introduction of the \u201cCash Before Cover\u201d requirement will have a particularly significant impact on day-to-day operations for both insurers and brokers engaged in international insurance placements.<\/p>\n

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.<\/p>\n

Key Regulatory Changes<\/strong><\/span><\/p>\n

    \n
  1. Cash Before Cover Requirement
    \n<\/span><\/strong>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.<\/li>\n
  2. Fapiao (Official Invoice)<\/span>
    \n<\/strong>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.<\/li>\n
  3. Policy Wordings and Special Agreements
    \n<\/strong><\/span>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.<\/li>\n<\/ol>\n


    \nHow to Proceed<\/span><\/strong><\/p>\n

      \n
    • Renew policies \u201cas expiring\u201d and ensure the renewal premium is paid before the renewal date.<\/li>\n
    • 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.<\/li>\n<\/ul>\n

      Detailed Payment Rules<\/strong><\/span><\/p>\n

        \n
      • Premium and insurance tax must be paid before issuance.<\/li>\n
      • Policies under CNY 200,000 cannot be paid in installments.<\/li>\n
      • Policies of CNY 200,000 or more may be paid in installments (first installment \u2265 25%).<\/li>\n
      • Up to 4 installments are allowed for 1-year policies;
        \nmulti-year policies may add 2 installments per additional year.<\/li>\n<\/ul>\n

        Advisory from Insurers<\/strong><\/span><\/p>\n

        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.
        \nClients will need to pay the premium first, after which the insurer will issue the Fapiao and policy.
        \nBrokers will issue a debit note as the payment request.<\/p>\n

        Advisory from TRC<\/strong><\/span><\/p>\n

        The regulation has just been announced and some details remain under clarification.
        \nInsurers must now determine whether to:<\/p>\n

          \n
        • allow limited back-dating after payment, or<\/li>\n
        • apply a strict \u201ccash-before-cover\u201d policy.<\/li>\n<\/ul>\n

          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<\/p>\n<\/div>

          <\/span><\/div><\/div><\/div>
          <\/span><\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/div>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":764,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[89],"tags":[],"class_list":["post-15933","post","type-post","status-publish","format-standard","hentry","category-news"],"yoast_head":"\nChina: Implementation of the new \u201cCash Before Cover\u201d regulation on November 1, 2025 - Trust Risk Control<\/title>\n<meta name=\"description\" content=\"We would like to inform you about important changes in the pricing of property and business interruption insurance in the Indian market, applicable to policies effective from January 1, 2025.Following the announcement of "de-tariffing" from April 1, 2024, prices dropped temporarily, but it has become evident that this strategy is not sustainable in the long run. 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