Monday, August 21, 2017

China drafts rules on endowment insurance

China is in the process of crafting regulations for individual tax-deferred commercial endowment insurance as part of preparations to launch a pilot program before its full implementation.

The China Insurance Regulatory Commission (CIRC) and the Ministry of Finance are closely working to develop such rules.

Endowment insurance involves a payment plan and pays the face value to the insured either at the end of the contract period or on the insured’s demise.

In a tax-deferred endowment insurance, the insured pays for premiums before tax payments and pays their personal income tax only after the endowment benefits are collected.

Yuan Xucheng, director of CIRC’s life insurance supervision department, said the time is ripe for China to pilot the program and the regulations will ensure fairness and funds security.

Earlier, the State Council issued a statement saying it is stepping up the pace of developing commercial endowment insurance.

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