Liaoning Insurance Regulatory Office Document [2011] No. 24
To all provincial branches of property insurance companies, and the provincial and municipal insurance industry associations:
Since the implementation of the "Pay Before Issuing Policy" management system for auto insurance, it has played a significant role in standardizing market order, effectively reducing operational risks for all property insurance institutions. However, issues such as non-compliance with advance payment have emerged during the implementation process, seriously affecting the authenticity of data for all property insurance institutions in the province and accumulating risks. To further improve the "Pay Before Issuing Policy" management system, the Liaoning Insurance Industry Association has issued the "Notice on Printing and Distributing the Detailed Implementation Rules of the 'Pay Before Issuing Policy' Management System for Motor Vehicles in Liaoning Province" (Liaoning Insurance Association Document [2011] No. 4), which revises relevant detailed implementation rules. All property insurance institutions are now required to strictly implement the new detailed implementation rules and earnestly ensure compliance. The following specific requirements are put forward:
1. Ensure Strict Implementation of the System
All property insurance institutions must attach great importance to this work. First, they should improve business processes, establish effective management systems, strengthen internal control management, and complete related system upgrades by the end of March to fully support various payment methods including cash, card swiping, and transfers. Second, they should ensure that vehicle insurance policies are issued only upon receipt of payment; ensure that there are no newly added accounts receivable premiums within their own systems. Third, they must prohibit insurance institutions, agency institutions, and agents from acting on behalf of others in card swiping activities, preventing legal risks caused by advance payment behavior; prohibit the false confirmation of premiums using outstanding account items.
2. Clearly Define Management Responsibilities
First, all property insurance institutions must implement internal management responsibilities. Members of the "Pay Before Issuing Policy" leadership group for auto insurance should each perform their duties, taking corresponding responsibility for system upgrades, advance payment issuance of policies, management of accounts receivable premiums, and control of outstanding account items within their own units. Second, the provincial insurance industry association should complete the system acceptance work for all property insurance institutions before April 15th and promptly report those institutions that fail the acceptance test to our bureau. Municipal insurance industry associations should timely investigate and understand the implementation status of local property insurance institutions, take the lead in resolving actual problems encountered in their regions, and report to the provincial insurance industry association in a timely manner. Third, our bureau will continue to strengthen supervision and inspection of the implementation of the "Pay Before Issuing Policy" policy for auto insurance, conduct monthly monitoring of relevant financial indicators, and carry out special inspections in the second half of the year, focusing on checking whether there are systemic issues with advance payment issuance of policies. For verified violations, penalties will be imposed according to regulations regarding off-book funds and anti-money laundering.
This notice is hereby issued.
February 15, 2011