Problems faced by insurance companies

Characteristics and Special Risks of China Insurance Industry

The development of China's insurance market is only more than 20 years, and it is still in an immature stage, and various basic systems are in the process of continuous improvement and perfection. Therefore, in addition to the above risks, it is necessary to combine the legal construction of China's insurance industry, the business process management of insurance institutions and the special situation of insurance companies to analyze the money laundering risks faced by China's insurance industry.

(1) Defects in insurance laws and regulations

At present, according to the requirements of the Anti-Money Laundering Law, insurance companies have begun to formulate a framework anti-money laundering system to guide their branches to gradually carry out anti-money laundering work. However, because insurance laws and regulations take the principle of utmost good faith and the principle of insurable interest as the standard of risk control, that is, insurance companies mainly control business risks from the perspective of controlling operating costs and risks, and take the subject matter of insurance risks as the center, according to the different risks of the insured, the insured, the subject matter of insurance and settlement cases, [2] the focus of anti-money laundering risk control is customer identification and fund transaction monitoring, which is obviously different from the control of business risks by insurance companies, so there are institutional defects in carrying out anti-money laundering internal control.

(2) There are loopholes in the business process management of insurance companies.

The business processes of insurance companies mainly include insurance exhibition, business underwriting and claims settlement. Due to the defects of China's system and imperfect market development, insurance companies have management loopholes in some business processes, leaving a lot of room for money launderers.

1. Insurance exhibition stage. Insurance exhibition industry is the marketing process of insurance companies, that is, providing insurance goods and services to customers. The modes of insurance exhibition include direct exhibition, insurance agent exhibition and insurance broker exhibition. China is still in the period of economic transformation, and there are inevitably prominent contradictions and problems in the young insurance market, such as vicious competition in the exhibition industry caused by the lack of local and individual credit and market rules. In order to seize the market and overcome the shortcomings of their own lack of brand and strength, some branches of newly established insurance companies take the initiative to attract customers by means of "two highs, one low and one expansion" (that is, high fees, high returns, low rates and expanded insurance responsibilities); Faced with the vicious behavior of these branches, long-established insurance companies have to participate in the vicious competition in the market irrationally in order to maintain the business scale to curb the rapid decline of market share, not to affect the company's market position and image, and to achieve the premium income target issued by the superior company. They have to adopt the means of "two highs, one low and one expansion", and even some business personnel can help customers launder money in order to win over customers. This vicious competitive environment leads to the management confusion of exhibition insurance companies, and also greatly facilitates money launderers to put their "black money" into the insurance system and complete the disposal stage of money laundering process. [3]

2. Business underwriting and claim settlement stage. Business underwriting refers to the behavior that the insurer agrees to accept the insurance application put forward by the applicant after examination. Claim settlement is the last stage of insurance business process. An insurance company shall professionally control the information such as the value of the insured property, the risk status of the insured property and the interests of the parties to the contract in underwriting, contract modification and claim settlement, and conduct strict customer identification. However, due to the lack of insurance market rules in China, some insurance intermediaries even instruct people who do not meet the requirements to provide false information in order to obtain commissions and handling fees, which is far from the requirements of customer identification in anti-money laundering laws and regulations. In order to stabilize their market share, insurance companies tolerate unreasonable demands put forward by policyholders, creating opportunities for money launderers to "drain" the "black money" entering the money laundering process.

(3) The organizational structure and governance structure of insurance companies are not perfect.

From the organizational structure, most insurance companies in China implement the management mode of head office, branch office and branch office, and the business activities between head office and branch office are carried out through authorization. This organizational structure should have strengthened the control ability of the top management. However, due to the imperfection of corporate governance structure and institutional mechanism, modern internal control means are not in place, a standardized and clear system and mechanism of responsibility, power and benefit have not yet been formed, and there is no early warning mechanism and modern means to restrain the illegal acts of the heads of grass-roots institutions. [4] From the perspective of governance structure, on June 5438+ 10, 2006, the China Insurance Regulatory Commission issued the Guiding Opinions on Regulating the Governance Structure of Insurance Companies (for Trial Implementation), which pointed out the direction for the construction of the governance structure of insurance companies in China. However, there are many factors affecting the corporate governance structure, including capital, professional managers and regulatory agencies, as well as the current situation of the construction of the corporate governance structure of insurance companies and the infrastructure related to the construction of the corporate governance structure of insurance companies. [5] In this case, the establishment and effective implementation of anti-money laundering internal control system faces great uncertainty.

Further reading: How to buy insurance, which is good, and teach you how to avoid these "pits" of insurance.