New invoice policy starts next month
By Xiao Zhang (China Daily)
Updated: 2004-06-03 08:45

Insurance intermediaries will be required from next month to start using a standardized invoice for their incomes, the China Insurance Regulatory Commission said yesterday.

The move is aimed at regulating the growing payments between insurance companies and their intermediaries, and will help increase State tax revenues, the commission said.

"The introduction of the invoice can hardly solve all the problems with insurance intermediaries, but it will definitely help," said Wang Jian, director of the commission's Intermediaries Supervision Department.

China's insurance intermediary market has grown rapidly in recent years. At the end of April, the number of specialized insurance intermediaries - including brokerages, agents and loss adjusters - stood at 1,264, while other non-specialized agents - many of them banks - totalled 120,000, the commission said.

Insurance premiums collected through intermediaries accounted for 75 per cent of all premiums last year.

But widespread accounting irregularities have been uncovered at insurance firms and their intermediaries when handling commission payments, which makes it difficult to verify such transactions and has led to losses in State tax receipts, the commission said.

Wang said the overall development of insurance intermediaries was healthy, as they have been critical to the growth of China's life insurance market and helped alleviate employment pressure.