More than 20 life insurers promised some policy holders a full refund if their insurance agents had misled or cheated them.

The move is aimed at boosting the life insurance sector in Shanghai by stopping disputes between insurers and clients. "The promise is a key step to boosting a prospering life insurance sector in Shanghai," said Sun Guodong, head of the Shanghai Bureau of the China Insurance Regulatory Commission.  He said a small number of agents had tarnished the image of the insurance industry by misleading and cheating clients, and it should be stopped.

From Nov 1, policy holders who believe they have been cheated can seek a full premium refund on investment-grade and participating life policies longer than one year. The policies must have been sold by an agent and be reclaimed within one year of purchase.

A participating life policy is one in which a holder pays higher premiums to be eligible for dividends from the insurance company. With investment-grade policies a slice of the holder's premiums are invested in the stock market.  Policy holders who have already got compensation are exempt from the full refund claim. Polices sold through banks are also excluded.

The insurers, including the Shanghai branches of Ping An Insurance, China Life Insurance and AIA Insurance, signed agreements on the promise.

Life insurance premiums in Shanghai topped 22.8 billion yuan (US$2.9 billion) in the first nine months, a year-on-year growth of 28.4 percent. Payment on life policies sat at 2.38 billion yuan in the same period, down 0.33 percent than a year ago.

In China, banks are considered more elite than insurance agents. Complaints from policy holders that agents haven't explained policy clear enough and made them fail to seek compensation is one main headache for the agent circle, partly due to the low market access.

Source:未知