The independent personal insurance agent system has landed, and the opportunity to bend the rules is here! -Workers Insurance Network
In law, an insurance agent is an institution or individual who receives commission from an insurer according to the insurer's commission and conducts insurance business on behalf of the insurer within the scope of the insurer's authorization.
In September 1992, American International Assurance Company (AIA) was approved to be established in Pudong as the first foreign insurance company, and it also introduced the personal insurance agent into China's insurance market.
With individual insurance agents gradually becoming the most important channel for insurance marketing in China, Huatai Property & Casualty Insurance took the lead in exploring and piloting the Exclusive Agent (EA) model in 2009 in response to the problems of "high entry rate+high shedding rate" and the lack of high level of professional insurance services among the ranks of individual insurance agents; in 2019, Sunshine Property & Casualty Insurance was approved to become the second EA. Sunshine Property & Casualty Insurance was approved to be the second pilot insurer and began to implement the exclusive independent insurance agent (EA) model nationwide. In particular, the concept of "independent personal insurance agent" was first introduced in the "Insurance Agent Supervision Provisions" issued by the CBIRC in 2020, making the independent personal insurance agent system even more imminent.
According to the Notice, an independent personal insurance agent is an insurance sales practitioner who signs a commission agency contract directly with an insurance company and carries out insurance sales independently. Unlike traditional team-based personal insurance agents, independent personal insurance agents work independently and are not subordinate to a team, nor are they allowed to develop an insurance marketing team. In addition, compared to personal insurance agents, independent personal insurance agents are subject to higher standards in terms of qualifications, integrity, professionalism, training, and so on.
The Notice is centered on the principles of "regulatory leadership, market choice, enhanced management, and risk prevention", and regulates the development of independent personal insurance agents in terms of access and exit, business model, and management responsibilities, and is committed to gradually diluting the problematic stock through a healthy increase in the number of agents.
1. Strict "entry" and "exit" to ensure a high threshold
In response to the original loose management mode of "wide entry, wide exit", the Notice, on the one hand, requires independent individual insurance agents to meet the basic requirements of "independent individual insurance agents", and on the other hand, requires independent individual insurance agents to meet the basic requirements of "independent individual insurance agents". On the one hand, the Circular requires independent personal insurance agents to meet the basic conditions of education, integrity and qualification, and to comply with the basic business norms such as authorized practice and compliance with the law.
On the other hand, the Circular makes it clear that once an independent individual insurance agent commits any of the violations listed in the Insurance Law and the Regulation on the Supervision of Insurance Agents, the insurance regulator will impose administrative penalties, such as barring him from the industry, and strengthen the disciplinary measures for breach of trust and pursue the responsibility of the insurance company to which he belongs. Therefore, the independent individual insurance agent to meet the conditions to enter the industry, once the violation of the immediate clearance of the industry, the "Notice" to the high threshold to maintain the independent individual agent team to the good development.
On the basis of guarding the two "ends", the Notice requires insurance companies to comprehensively examine the independent personal insurance agents' years of experience, business ability, professional knowledge, academic status, and honesty record in accordance with the requirements of sales capacity qualification grading, and to implement differentiated authorization. By guiding independent personal insurance agents to develop their business in a compliant manner within the scope of their abilities, the Circular aims to ensure the healthy development of the independent personal insurance agent industry with high standards.
2. Breaking down the insurance marketing hierarchy and maintaining independence
In the traditional "pyramid" type marketing structure, the distribution model and payroll system are the highlights of the model as well as the constraints to development: insurance companies tend to place more emphasis on the quantity of manpower than the quality of manpower in the pursuit of performance, and the agent team also pays more attention to the pursuit of commissions. The insurance companies tend to emphasize the quantity rather than the quality of manpower for the pursuit of performance, and the agency team tends to rapidly expand the insurance agency channels for the pursuit of commission, which has also affected the overall perception of the insurance industry in the society.
Unlike the old model, independent individual insurance agents, as insurance sales practitioners who sign direct agency contracts with insurance companies, are able to charge commissions based on the insurance premiums they sell directly; free from the constraints of organizational hierarchies, they can adopt the traditional form of "businessmen" or open stores (studios) and other fixed business premises, and hire support staff. They can adopt the traditional form of "businessman" or open fixed business premises such as stores (studios), and hire auxiliary staff to assist in the issuance of insurance policies and after-sales services. This is undoubtedly a good opportunity for individual insurance agents to "bend the road and overtake the car" in terms of revenue.
In order to avoid independent personal insurance agents from repeating the same old path of developing hierarchical teams, the Circular prohibits independent personal insurance agents from allowing or requiring auxiliary personnel to engage in insurance promotion and sales activities, setting premium income assessment indexes, and pointing out that the auxiliary personnel should not be more than three people in principle; on the other hand, it also makes it clear that insurance companies should put an end to the interests of the hierarchy of independent personal insurance agents, and establish an independent personal insurance agent business based on the quality of business and service quality. On the other hand, it is also clear that insurance companies should eliminate the hierarchical interests of independent personal insurance agents and establish a commission and fee system and assessment system based strictly on business quality and service quality.
It is not difficult to imagine that by maintaining the independence of the business and eliminating indirect commissions, the Notice is expected to attract outstanding agents to "fly solo", improve the level of professional insurance services of insurance sales staff, and promote the development of the independent personal insurance agent team to specialization and professionalism.
3, the implementation of the management responsibility of the insurance company, in order to gradually independent
Internationally, independent personal insurance agents are not only "independent" in the absence of hierarchical relationships, but also "independent" in the ability to act for two or more insurance companies at the same time. The notice does not emphasize the importance of independent individual insurance agents. The Notice does not emphasize the "independence" of the independent personal insurance agent in business with the insurance company, on the contrary, it is clear: the independent personal insurance agent is authorized by the insurance company to handle the insurance business on behalf of the insurance company, the insurance company is responsible for the behavior.
Therefore, under the premise that an independent personal insurance agent belongs exclusively to a certain insurance company and can only act as an agent for the corresponding products, the insurance company is obliged to bear the management responsibility. According to the Notice, insurance companies should strictly select independent personal insurance agents and strictly manage their personnel; they should also implement the management responsibility of independent personal insurance agents, strengthen the management of business authorization and practice registration, and enhance the daily management and risk control, as well as strictly manage their behaviors.
Correspondingly, the Notice also develops the independent personal insurance agent model with insurance companies as the unit, requiring insurance companies to report in writing to the insurance regulator on work planning, management system, business status, risk control and other aspects before implementation, and to fill in the data of the independent personal insurance agent business on a regular basis during the process. At the same time, the Notice also requires insurance regulators to investigate and deal with insurance companies' failure to fulfill their control responsibilities and hold them accountable.
It is not difficult to understand that this is a prudent choice in the early stage of the development of independent personal insurance agents in China; it is conceivable that in the near future China may be fully integrated with the developed independent agent market, allowing independent personal insurance agents to establish mutually independent agency relationships with different insurance companies.
Additionally, considering the fact that professional insurance agents and insurance brokers are basically the same as insurance companies' sales staff in terms of job content and development mode, the Notice also stipulates that professional insurance agents and insurance brokers and their staff can refer to the Notice. Therefore, not only for individual insurance agents, for insurance companies, insurance professional agencies, insurance brokerage institutions, this is undoubtedly the performance of the opportunity to "bend the road to overtake".
The "Outline of the 13th Five-Year Plan for the Development of China's Insurance Industry" points out that it is necessary to establish a multi-level, multi-component, multi-form insurance intermediary services, with the "Notice" formally implemented on January 1, it is expected to promote the acceleration of the landing of the independent individual insurance agent model, thus alleviating the high mobility of the insurance agent staff, the retention rate is low, and improving the stability of the sales force and the stability of the insurance industry. The company is expected to accelerate the implementation of the independent individual insurance agent model, thereby alleviating the high mobility and low retention rate of insurance agents, improving the stability of the sales force and the level of professional insurance services, and ultimately facilitating the high-quality transformation of the industry.