China has decided to expand the scope of insurance companies allowed to develop and offer the so-called exclusive commercial pension insurance products, in a bid to promote the development of commercial pensions, according to a circular unveiled to the public by the National Financial Regulatory Administration on Wednesday.

Such insurance programs refer to private pension annuity products offered to improve income streams for the elderly, with pensioners receiving the start of their payments when they reach 60-years-old.

Composed of 33 items, the circular stipulated certain requirements on insurance companies to operate the business, including that on their solvency adequacy ratio and liability reserve coverage ratio.

It has also standardized the product design of the commercial pension insurance programs as well as information disclosure requirements for insurance companies. For instance, it set standards on the accumulation period, insurance liability and cash value, implementing unified filing management of insurance program terms and premium rates.

The circular also clarified that insurers are allowed to entrust qualified commercial banks to promote and sell the commercial pension insurance products.

The country started pilot work on the commercial pension insurance in June 2021, exclusively in Zhejiang province and Chongqing city, among six selected insurers including PICC Life Insurance and China Life.

The pilot work aimed to explore new ways to provide pension services for Chinese people, especially those who work in new industries, new business formats, or are under flexible employment.

In March last year, the authorities expanded the pilot work nationwide, allowing pension firms to participate.

The circular was issued and took effect on Oct 20, marking the completion of the pilot work, according to the NFRA.

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