Banking

China sets new rules for banks selling insurance

(Agencies)
Updated: 2010-11-09 10:36

HONG KONG - China's banking regulator on Monday unveiled new rules governing the sale of insurance by banks as lenders get set to diversify into the area under recently relaxed rules.

Banks will now be required to perform a risk profile assessment and record telephone conversations its staff have with customers before selling them insurance, the China Banking Regulatory Commission said in a statement.

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"Banks should highlight all possible risks associated with an insurance product and not sell them together with deposits," the CBRC said in the statement.

China's banks have begun looking away from being pure lenders to drive future earnings growth, potentially clashing with insurance firms such as China Life and Ping An.

ICBC, the world's most valuable lender, said in October it had paid $180 million to buy control of French insurer AXA's China joint venture, expanding into the country's fast-growing $100 billion life insurance market.

On the other side, Ping An's buy of a 30 percent stake in Shenzhen Development Bank underscores its own dreams to be a financial conglomerate modelled after the likes of HSBC and Citigroup.