National Development and Reform Commission, Ministry of Health, Ministry of Finance, Ministry of Human Resources and Social Security, Ministry of Civil Affairs and China Insurance Regulatory Commission, Guiding Opinions on the Launch of the Work on Critical Illness Insurance of Urban and Rural Residents

A commercial insurance institution that underwrites critical illness insurance must satisfy the following basic conditions:

(i) satisfying the mandatory conditions for dealing in health insurance specified by the China Insurance Regulatory Commission (CIRC);

(ii) engaging in health insurance as a separate business in China for at least five years and having a good market reputation;

(iii) having a sound service network and relatively strong professional medical insurance capabilities;

(iv) having full-time working personnel with a professional medical or other such background;

(v) the head office of the commercial insurance institution consenting to its (sub-)branches participating in local critical illness insurance business, and providing business, financial and information technology support thereto; and

(vi) being able to realise independent accounting of the critical illness insurance business (Section Five (3)).

Issued: August 24 2012

Main contents: The health, human resources and social security, finance, and development and reform departments of local governments shall formulate the basic government policy requirements in respect of fund raising, scope of claims and minimum indemnity percentage for critical illness insurance as well as of the administration of medical consultations, settlement, etc., and select commercial insurance institutions to underwrite critical illness insurance through a government invitation for bids (Section Five (1)).

The bid inviter shall execute an insurance contract with the winning commercial insurance institution, the term of cooperation of which shall not, in principle, be less than three years. The principle of “breaking even with a modest profit” shall be complied with, and the appropriate dynamic adjustment mechanism may be established in the contract for excessive balances and government policy related deficits (Section Five (2)).

Premium income from the underwriting of critical illness insurance shall be exempt from business tax in accordance with current provisions (Section Five (1)).

A commercial insurance institution that underwrites critical illness insurance must satisfy the following basic conditions:

(i) satisfying the mandatory conditions for dealing in health insurance specified by the China Insurance Regulatory Commission (CIRC);

(ii) engaging in health insurance as a separate business in China for at least five years and having a good market reputation;

(iii) having a sound service network and relatively strong professional medical insurance capabilities;

(iv) having full-time working personnel with a professional medical or other such background;

(v) the head office of the commercial insurance institution consenting to its (sub-)branches participating in local critical illness insurance business, and providing business, financial and information technology support thereto; and

(vi) being able to realise independent accounting of the critical illness insurance business (Section Five (3)).