Universal insurance faces new regulations after a 9-year gap, allowing for the first time to adjust the minimum guaranteed interest rate.

Since undergoing strict rectification in 2016, after a gap of 9 years, the universal life insurance business is facing new regulatory measures again. The China Banking and Insurance Regulatory Commission recently issued a notice on strengthening the supervision of universal life insurance products, allowing adjustments to the minimum guaranteed interest rate of universal life insurance products, strengthening the supervision of fund concentration and non-standard investments of universal life insurance products. The notice aims to address prominent issues such as the improper operation of universal life insurance accounts and the relatively aggressive use of funds by individual companies from a systemic perspective, further standardize the market order of universal life insurance products, and promote the sustainable and healthy development of universal life insurance products. Industry experts believe that as a type of floating income product, universal life insurance products are beneficial for insurance companies to address interest rate risks. The notice will further standardize the universal life insurance business, promote life insurance companies to better develop universal life insurance products under the new regulations, optimize their business structure, and better manage their liability costs.