Alert issued on fake insurance products
China's insurance regulator has recently warned against fake insurance products, especially the so-called "love insurance" offered online that bets on the relationships of public figures.
One such product appeared online in the wake of the announcement in October that Lu Han and Guan Xiaotong, two young celebrities with large numbers of fans, were in a relationship.
The product, at a price of 11.11 yuan ($1.73) per share, pledged that if Lu and Guan are still in a relationship after a year, the buyer would get double the money back from the insurance seller.
According to a report by the People's Daily-run International Financial News on Tuesday, the product has gone off shelf. An earlier online clip shows that the product secured 60 deals.
A similar product, betting on whether Wang Junkai, another young celebrity, will fall in love in a year, however, is still online. According to the product description, the buyer gets paid three times from the seller if Wang falls in love within a year. The product is sold at 10 yuan per share. No deal has been made to date.
"Love insurance" involving public figures is not an insurance product. It does not comply with the law and is not sold by insurance institutions, the China Insurance Regulatory Commission said in a statement published on its official website.
Buyers of such a product will face the risk of not being legally protected, it added.
The ID numbers of online shops that sell the products are not of insurance companies or agencies but individuals, the International Financial News pointed out.
"'Love insurance' on public figures seems like an innovative insurance product. It in fact is not. Instead it is illegal fundraising with a certain gambling nature," said an industry insider.
In recent years, insurance companies have launched a variety of products via online platforms to entice buyers.
In April 2015, the CIRC called off an online insurance product which vowed to pay 10,000 yuan in compensation to the buyer if the buyer's stock suffers a daily limit down on the stock market. The minimum amount insured for a stock is 100 yuan. The product was misleading and contained the nature of gambling, said the CIRC.
Some products, although legal, came out with stunt names. One product that insured against frostbite, cold and injuries from falls in the snow, for instance, was called "Forgetting-to-wear-long-johns Insurance".
Besides, there were products created for various reasons. In 2015, an online product was launched, promising to pay the litigation fees if the buyer, who helped the elderly, was mistaken for someone harming the elderly. There were also products pledging to compensate the buyer for overworking and for the buyer's child causing injuries or property loss to a third party.
In guidance on the development of products by property insurance companies issued in January 2017, the CIRC has specified that insurance companies should not develop products with no real meaning or for sensational concepts.
"China's internet insurance industry is still nascent," said Tuo Guozhuo, professor of the Insurance Department of Capital University of Economics and Business.
Insurance companies should comply with laws and regulations in developing new products; the CIRC should strengthen its oversight and take timely actions to rectify wrong practices; and consumers should be more alert, he said.
