State Council Issues New Guidelines to Accelerate the Development of Commercial Pension Insurance

To the People's Governments of all provinces, autonomous regions, and municipalities directly under the Central Government, and to all ministries and commissions of the State Council and all institutions directly under the State Council:

Commercial pension insurance refers to insurance products and services provided by commercial insurance institutions, with primary coverage including old-age risk protection and pension fund management. It constitutes an important component of the old-age security system. Developing commercial pension insurance is of great significance for improving a multi-tiered old-age security system, promoting the multi-level and diversified development of the elderly care service industry, addressing the trend of population aging and new changes in employment patterns, further safeguarding and improving people’s livelihoods, and fostering social harmony and stability. To thoroughly implement the requirements set forth in documents such as the “Decision of the Central Committee of the Communist Party of China on Several Major Issues Concerning Comprehensively Deepening Reforms,” the “Several Opinions of the State Council on Accelerating the Development of the Elderly Care Service Industry” (Guo Fa [2013] No. 35), and the “Several Opinions of the State Council on Accelerating the Development of the Modern Insurance Service Industry” (Guo Fa [2014] No. 29), and with the approval of the State Council, the following opinions are hereby proposed on accelerating the development of commercial pension insurance:

We will comprehensively implement the spirit of the 18th National Congress of the Communist Party of China (CPC) and the Third, Fourth, Fifth, and Sixth Plenary Sessions of the 18th CPC Central Committee; deeply study and apply General Secretary Xi Jinping’s series of important speeches and his new concepts, ideas, and strategies for governance; earnestly carry out the decisions and arrangements of the CPC Central Committee and the State Council; firmly establish the new development philosophy; focus on improving the quality and efficiency of development; take supply-side structural reform as the main line; address population aging, meet the people’s growing demand for old-age security, and promote social harmony and stability as our starting point; improve the old-age risk protection mechanism, enhance the efficiency of pension fund utilization, and optimize the pension financial service system as our direction; rely on the professional advantages of commercial insurance institutions and the role of market mechanisms; expand the supply of commercial pension insurance products, broaden service areas, and strengthen protection capabilities; and fully leverage the vital role of commercial pension insurance in strengthening the old-age security system, promoting the development of the elderly care service industry, and facilitating economic quality improvement, efficiency enhancement, and upgrading.

Uphold Reform and Innovation to Enhance Security Levels. Guided by the goals of addressing population aging and safeguarding and improving people's livelihoods, we will remain focused on our core business, deepen institutional and mechanistic reforms in commercial pension insurance, stimulate innovation vitality, increase the supply of pension security products and services, improve service quality and efficiency, and better meet the diverse and multi-level pension security needs of the public.

Adhere to policy guidance and strengthen market mechanisms. Better leverage the government’s guiding and facilitating role by providing necessary policy support for the development of commercial pension insurance and creating a favorable policy environment. Fully unleash the decisive role of the market in resource allocation, and encourage market entities to pursue specialized and differentiated development in their related businesses.

Adhere to improving supervision and standardize market order. Always take the protection of the legitimate rights and interests of insurance consumers as the starting point and foundation for the supervision of commercial pension insurance, adhere to bottom-line thinking, improve the institutional system, strengthen regulatory coordination, enhance the implementation of systems, eliminate administrative apportionment and forced buying and selling, and create a market environment characterized by equal participation, fair competition, integrity, and standardization.

By 2020, a commercial pension insurance system will be basically established, characterized by safe and sound operations, diverse product forms, broad service coverage, strong professional capabilities, sustained and moderate profitability, and honest and standardized business practices. Commercial pension insurance will become the primary provider of commercial pension protection plans for individuals and families, an important supplier of employer-sponsored commercial pension protection plans, an active participant in the market-oriented operation of social pension security, a strong promoter of the healthy development of the elderly care service industry, and a stable supporter of financial security and economic growth.

(4) Enrich the supply of commercial pension insurance products to provide personalized and differentiated pension protection for individuals and families.Support commercial insurance institutions in developing diversified commercial pension insurance products to meet the needs of individuals and families in terms of risk protection and wealth management. Actively develop commercial pension annuity insurance that offers high safety, strong protection, and meets the requirements for long-term or lifetime payouts. Support eligible commercial insurance institutions in actively participating in pilots of tax-deferred commercial pension insurance. In response to the pension security needs of special groups such as one-child families, childless families, and “empty-nest” families, explore the development of comprehensive pension security plans covering a variety of insurance products and services. Allow commercial pension insurance institutions to legally and compliantly develop personal pension security management businesses that feature long-term pension functions and align with the characteristics of lifecycle management.

(5) Promote the provision of products and services such as enterprise (occupational) annuity plans by commercial insurance institutions.Encourage commercial insurance institutions to develop commercial insurance products that integrate with the disbursement of enterprise (occupational) annuities, thereby strengthening the pension function of these funds. Support eligible commercial insurance institutions in applying for relevant qualifications and actively participating in the management of enterprise annuity funds and occupational annuity funds, providing high-quality and efficient services in fund trusteeship, account management, and investment management. Encourage commercial insurance institutions to enrich the supply of commercial pension insurance products, optimize related services, and provide diversified pension protection options tailored to the market demands of employees in innovative and entrepreneurial enterprises.

(6) Encourage commercial insurance institutions to fully leverage their industry advantages in providing commercial services and support.Leverage the advantages of commercial insurance institutions in areas such as actuarial management and service resources to provide technical support and related services for the reform of the pension insurance system. Support eligible commercial insurance institutions in utilizing their asset management strengths to participate, in an orderly manner and in accordance with laws and regulations, in the investment and operation of the basic pension insurance fund and the National Social Security Fund, thereby promoting the preservation and appreciation of pension insurance funds and social security funds.

(7) Encourage commercial insurance institutions to invest in the elderly care service industryLeverage the long-term and stable nature of commercial pension insurance funds, adhere to the principles of legal compliance, prudence, and safety, and actively establish elderly care communities as well as facilities and institutions providing elderly health services—such as senior wellness, health check-ups, rehabilitation management, medical nursing, and leisure-based healthcare—through investments in new construction, equity participation, mergers and acquisitions, leasing, and trusteeship. Provide support for the research, development, and production of elderly care products by relevant institutions, thereby increasing the supply of elderly care services. Encourage commercial insurance institutions to actively participate in comprehensive reform pilots of the elderly care service industry and accelerate the development of elderly care service systems in pilot regions.

(8) Support commercial insurance institutions in providing risk protection services to elderly care facilities.Explore cooperation models between commercial insurance institutions and various types of elderly care facilities, develop comprehensive liability insurance tailored to the operational and management risk requirements of these facilities, and enhance their operational efficiency and stability. Support commercial insurance institutions in developing liability insurance for institutions providing short-term elderly care and cultural, sports, and leisure activities, such as community day-care centers, senior activity centers, elderly daycare facilities, and mutual-aid community elderly care service centers.

(9) Establish and improve a comprehensive old-age security plan for the elderly.In response to the elderly’s need for old-age security, we should adhere to the principles of moderate coverage, reasonable premiums, and easily understandable policy terms, and vigorously develop commercial insurance products with strong age-appropriateness, such as accident insurance for the elderly, long-term care insurance for the elderly, and reverse mortgage pension insurance. We should also improve supporting financial services, including policy loans and diversified forms of pension payments. Step by step, we will establish comprehensive old-age security plans that integrate long-term care, combined wellness and eldercare, and integrated medical and eldercare services, thereby strengthening the service and security system encompassing eldercare, rehabilitation, nursing, and medical care.

(10) Leverage the long-term investment advantages of commercial pension insurance funds.Adhering to the principles of controllable risk and commercial sustainability, we will promote the steady and orderly participation of commercial pension insurance funds in the implementation of major national strategies. We support commercial pension insurance funds participating in major projects and livelihood initiatives—such as critical infrastructure, shantytown renovation, and new-type urbanization—through instruments including debt investment plans, equity investment plans, real estate investment plans, asset-backed plans, and insurance asset management products. These efforts aim to serve the development of technology-based enterprises, small and micro businesses, strategic emerging industries, and new formats in consumer services, thereby facilitating the mixed-ownership reform of state-owned enterprises.

(11) Promote the coordinated development of commercial pension insurance funds and the capital market.Leverage the positive role of commercial insurance institutions as long-term institutional investors in the capital market, participate in investments in stocks, bonds, and securities investment funds in an orderly manner in accordance with the law, provide long-term and stable financial support for the steady and healthy development of the capital market, and engage in a standardized and orderly manner in the development of the capital market.

(12) Prudently conduct overseas investments with commercial pension insurance funds.Under the premise of controllable risks, steadily develop overseas investment operations for commercial pension insurance funds, rationally allocate overseas assets, and optimize the allocation structure. Support commercial pension insurance funds in conducting overseas market investments through relevant pilot free trade zones; in accordance with the principle of commercial sustainability, participate in an orderly manner in investment projects led by entities such as the Silk Road Fund, the Asian Infrastructure Investment Bank, and the New Development Bank of the BRICS countries, so as to better serve the national “Going Global” strategy.

(13) Strengthening institutional development.Adhere to the principle of establishing regulations first, improve the institutional framework for the management and operation of commercial pension insurance, optimize business processes, enhance operational efficiency, and strengthen the standardization of commercial pension insurance operations. Refine and improve business rules for key investment areas of commercial pension insurance funds, strengthen limit management, and explore the establishment of a tiered management mechanism for overseas investments. Improve guiding policies for commercial pension insurance to serve national strategies and supporting policies to facilitate the development of the real economy.

(14) Enhance service quality.Establish and improve service standards for commercial pension insurance, and build a service evaluation system centered on customer satisfaction. Deepen the construction of a customer-centric operational management system, leverage modern technological means to promote innovation in sales channels and service models, and provide efficient and convenient services to insurance consumers. Focus on key service stages such as sales, underwriting, and claims settlement, strive to enhance service quality, improve the consumer experience, and strengthen and cultivate commercial brand reputation.

(15) Develop professional institutions.Enhance the professional ethics and competence of practitioners in the commercial pension insurance sector, strengthen the cultivation and recruitment of specialized talent, and improve vocational education. Support qualified commercial insurance institutions in establishing commercial pension insurance entities, broaden channels for private capital to participate in the investment and operation of such institutions, and permit overseas professional institutions with strong expertise and high market reputation to invest in commercial pension insurance institutions.

(16) Strengthen supervision and management.Improve regulatory policies for commercial pension insurance, strengthen supervision and inspection, standardize market order, and enhance the protection of insurance consumers’ rights and interests. Implement requirements of the solvency regulatory framework, strengthen oversight of the utilization of commercial pension insurance funds, and improve mechanisms for risk monitoring, early warning, and information disclosure. Urge commercial insurance institutions to bolster their investment capabilities and risk management controls, reinforce asset-liability matching and risk control measures, mitigate investment-related risks, ensure the preservation of value and reasonable returns on commercial pension insurance funds, and elevate the level of insurance protection.

(17) Strengthen organizational leadership and inter-departmental coordination.All regions and relevant departments shall incorporate the accelerated development of commercial pension insurance into the overall deployment for improving the old-age security system and accelerating the development of the elderly care service industry. They shall strengthen communication and coordination, innovate institutional mechanisms, and actively study and resolve major issues arising in the development of commercial pension insurance. Relevant departments may refine and improve supporting policy measures in accordance with the spirit of these Opinions. The people’s governments of all provinces (autonomous regions, and municipalities directly under the Central Government) may formulate specific implementation opinions based on local conditions to promote the sustained and healthy development of commercial pension insurance in their respective regions.

(18) Strengthen policy support for investment, fiscal and taxation, etc.Formulate and study investment support policies for commercial pension insurance to serve the real economy, improve risk protection mechanisms, and provide green channels and priority support for commercial pension insurance funds to serve national strategies, invest in major projects, and support the construction of livelihood projects. Implement the national tax preferential policies supporting the development of modern insurance services and elderly care services, exempting value-added tax on premium income from personal insurance with a term of more than one year collected by commercial insurance institutions. Launch pilots of individual tax-deferred commercial pension insurance before the end of 2017. Formulate and study relevant policies for commercial insurance institutions to participate in the investment and operation of the National Social Security Fund.

(19) Improve local support and guarantee policies.People’s governments of all provinces, autonomous regions, and municipalities directly under the Central Government shall formulate coordinated plans for the development of the elderly care service industry, encourage eligible commercial insurance institutions to invest in this sector, and effectively implement land-use guarantee policies for elderly care service facilities. Commercial insurance institutions are supported to establish medical institutions, such as hospitals, outpatient clinics, and rehabilitation centers, within the elderly care institutions they invest in and operate, in accordance with laws and regulations; those meeting the specified conditions may be included in the designated provider network for urban and rural basic medical insurance schemes as prescribed. Support is extended to commercial insurance institutions in offering reverse mortgage pension insurance products. Green channels shall be established at real estate transaction, registration, and notarization agencies to reduce fee standards, streamline administrative procedures, and enhance service efficiency.

(20) Create a favorable environment.Vigorously popularize knowledge about commercial pension insurance and enhance public awareness of such insurance. Focus on meeting the diverse elderly care security needs of the public through commercial pension insurance, intensify publicity efforts, and actively promote proven best practices. Strengthen the construction of a credit system in the insurance industry, and promote the implementation of joint incentive mechanisms for trustworthy behavior and joint disciplinary measures for untrustworthy conduct. Enhance industry self-discipline, advocate fair competition and cooperation, and create a favorable environment for the healthy development of commercial pension insurance.

General Office of the State Council

June 29, 2017

(This document is publicly released)