A supplementary agreement, all the leverage of insurance is gone, what makes insurance "unsafe"?
On July 28, the Consumer Rights Protection Bureau of the Bancassurance Regulatory Commission reported the illegal operation of Taiping property Insurance. In a loan performance bond insurance, Taiping property Insurance reduces the coverage to 2% of the amount in the original insurance clause by arranging a supplementary agreement.
"the above-mentioned acts of Taiping property Insurance have seriously infringed upon consumers' basic rights such as the right to know, the right to fair transaction and the right to claim compensation in accordance with the law, and damaged the legitimate rights and interests of consumers. Our bureau will deal with Taiping property insurance in strict accordance with the rules and regulations." Bancassurance Regulatory Commission Consumer Rights Protection Bureau said in the notice.
This is not the first time Taiping property Insurance has violated the rules on similar products. Four years ago, when Taiping property Insurance sold "loan credit insurance" to Zhangjiagang Agricultural Bank and Suzhou Bank, it sold at ultra-high real rates of 10% and 7.2% respectively, because of the illegal act of not strictly enforcing the reporting terms and rates. was fined 340000 yuan by the local former insurance supervision bureau.
How can the insured amount be reduced by 98%?
On July 28, the situation of consumer rights protection of the China Banking and Insurance Regulatory Commission informed the banking, insurance and administrative units of the illegal operation of Taiping property Insurance.
Here's what happened. In November 2015, Taiping property Insurance Shanghai Branch signed a "second-hand car dealer financing project loan performance guarantee insurance cooperation agreement" with a financial leasing company. The Agreement stipulates that leasing companies provide financing services to car dealers with second-hand vehicle inventory and financing needs, and car dealers pay rent to leasing companies; in order to ensure that car dealers fulfill their obligations to pay rent, leasing companies purchase loan performance guarantee insurance from Taiping and pay insurance premiums directly to Taiping.
In the "loan performance guarantee insurance" insurance policy issued by Taiping, the car dealer is the insured, the leasing company is the insured, the insured amount is the loan principal plus interest, the insurance period is the loan term (one year), and the insurance rate is 2%.
From November 2015 to April 2018, Taiping has written a total of 1289 insurance policies, with a total premium income of 7.3951 million yuan and a total insurance amount of 469 million yuan.
This was supposed to be a normal loan performance bond insurance, but then it changed.
In September 2018, with the approval of Taiping property Insurance Corporation, Taiping signed with the leasing company the Supplementary Agreement on Cooperation Agreement on performance guarantee Insurance for used car Merchants' financing projects, and re-set the conditions for underwriting and settlement of claims. including the revision of the cumulative compensation limit.
The contents of the Supplementary Agreement, such as "the cumulative compensation limit for this project shall be 110% of the paid-in premium", compared with Article 8 of the loan performance guarantee Insurance clauses of Taiping property Insurance Co., Ltd., which was filed in 2015, "the insured amount of this insurance contract is the sum of loan principal and interest specified in the loan contract concluded between the insured and the insured". The Supplementary Agreement significantly reduced the total amount of compensation by as much as 98%.
In other words, by changing the filing terms through the supplementary agreement, the amount of insurance underwritten by Taiping property Insurance has been reduced to 2% of the original amount.
From September 2018 to March 2019, Taiping divided into a total of 201 underwriting policies, involving 59 policyholders, with a total premium income of 3.1664 million yuan and a total insurance amount of 168 million yuan.
However, according to the Supplementary Agreement, the total liability actually borne by Taiping has changed from 168 million yuan of the insured amount to 110% of the paid-in premium, that is, 3.483 million yuan, with a difference of nearly 165 million yuan. The terms of the above insurance policies issued by Taiping are all the terms of the loan performance guarantee insurance clause of Taiping property Insurance Co., Ltd., which was filed in 2015.
"the above-mentioned acts of Taiping property Insurance have seriously infringed upon consumers' basic rights such as the right to know, the right to fair transaction and the right to claim compensation in accordance with the law, and damaged the legitimate rights and interests of consumers. Our bureau will deal with Taiping property insurance in strict accordance with the rules and regulations." Bancassurance Regulatory Commission Consumer Rights Protection Bureau said in the notice.
The notice reveals the hidden rules of the industry
After reading the circular, it is not difficult to find that there are many strange places in this case.
First of all, after the supplementary agreement was signed, the amount of insurance received by the leasing company dropped to 2% of the previous amount, which means that the insurance rate has been greatly increased. Why does such a high-priced insurance policy exist?
A person in the industry reminds that the premium is from the car dealer, but the car dealer is not the beneficiary of the claim, and the insured is compensated by the leasing company.
This is easy to understand: in order to successfully obtain loans, car dealers are willing to pay a high price to buy insurance, and will not care about the actual protection of leasing companies in the supplementary agreement; and because the risk of this kind of business is too high, the insurance company has assessed the risk and found that if it loses the full amount of principal and interest, it may lose money, so it designs a supplementary agreement of 110% premium, which increases the price in a disguised form.
Secondly, the insurance company charged a premium of 100 yuan and lost 110 yuan after the accident. Is this price reasonable?
According to a reporter from the Securities Times, there are two important principles in determining the insurance rate, one is the principle of fairness, that is, on the one hand, the premium income must be relative to the expected payment, on the other hand, the premium borne by the insured should be consistent with the insurance rights obtained; the second is the principle of rationality, which means that the insurance rate should be as reasonable as possible, and the insurer should not obtain excess profit because the insurance rate is too high.
Under what circumstances will an opponent of an insurance company agree to accept such an insurance policy? The answer is not known, but it is understood that the matter was discovered by the Consumer Protection Bureau through the investigation of complaints.
Some people in the industry told reporters that products such as loan performance bond insurance are risky, and insurance companies will underwrite losses if they are not careful. This kind of private rate increase is not a new problem, but an old problem, which is an "hidden rule" in the industry.
It is worth mentioning that this is not the first time Taiping property Insurance has been given a red light on similar products.
On June 13, 2016, the Suzhou Regulatory Bureau of the former China Insurance Regulatory Commission issued an administrative penalty decision, indicating that Taiping property Insurance Suzhou Branch had committed an illegal act of not strictly enforcing the reporting terms and rates.
When Taiping property Insurance Suzhou Branch sold the "loan credit insurance" business to Zhangjiagang Agricultural Bank and Suzhou Bank, it sold at an actual insurance rate of 10% and 7.2% respectively, which was inconsistent with the figures previously reported to the regulatory authorities. The former Insurance Regulatory Bureau made a decision of fining the company and relevant responsible persons a total of 340000 yuan.
Take action against the Supplementary Agreement
In the Taiping property Insurance case, there is a discrepancy between the terms of the insurer's contract and the supplementary agreement. In fact, this kind of practice is not uncommon in insurance practice.
When the terms of the main contract and the supplementary agreement are inconsistent, which shall prevail? A number of lawyers said that the supplementary agreement should prevail, the supplementary agreement is the autonomy of the will of both parties, the legal effect is higher than the standard terms.
In the interview, some people in the industry said that although the supplementary agreement is effective, the agreements and supplements that are obviously unfair cannot be justified.
"the Consumer Security Bureau has made an attack on the supplementary agreement this time, and this case is of landmark significance." An insurance industry observer said.
Not long ago, the Kingold Jewelry Inc fake gold case underwritten by PICC property insurance also appeared that the contents of the insurance policy, insurance format contract and supplementary agreement were inconsistent. In the future, it is worth paying attention to whether the grey area of the insurance supplementary agreement will usher in the relevant inspection.