Insurance Industry's Worst Disaster Areas Exposed, Avoid These Pitfalls At All Costs! | "3·15" Series

Every year, “3.15 Consumer Rights Day” is a focal point for public attention, and the insurance industry, closely related to everyone’s personal interests, becomes a hotspot for complaints and doubts.

According to the China Banking and Insurance Regulatory Commission, in 2025, the country’s insurance premium income reached 6.12 trillion yuan, a year-on-year increase of 7.4%; among them, property insurance was 1.47 trillion yuan, and life insurance was 4.65 trillion yuan. The total assets of the insurance industry reached 41.31 trillion yuan, a 15.1% increase; net assets were 3.66 trillion yuan, up 10.2%, with the overall industry steadily expanding.

Regulatory penalties increase, with fines exceeding 400 million yuan, hitting a new high

However, behind these impressive figures, violations and complaints in the industry have never stopped—according to incomplete public data, the insurance industry was fined over 400 million yuan in 2025, an approximately 18% increase from about 337 million yuan in 2024, reaching a recent high. About 2,300 fines were issued, involving 1,517 institutions (including head and branch offices) and over 2,300 responsible persons.

In terms of institution types, property insurance companies received the largest fines. Public data shows that property insurers were fined about 2.33 billion yuan in 2025, accounting for 57.32% of total fines, involving 660 institutions, with 1,018 fines issued; life insurance companies were fined 1.39 billion yuan, accounting for 34.05%, involving 607 institutions, with 968 fines; insurance intermediaries were fined 35.18 million yuan, accounting for 8.62%, involving 243 institutions.

Notably, in 2025, regulatory authorities completed the thorough cleanup of Tianan Tiance Insurance and Tianan Life Insurance under the “Tomorrow Group”: both companies had their business licenses revoked, 19 responsible persons were fined and banned from industry for 3 years to lifelong, with total fines of 3.52 million yuan. Since the takeover of “Tomorrow Group” insurers (including Huaxia Life, Tianan Life, Tianan Property, and Yian Property) and Huaxia Jiuying Asset Management, 94 responsible persons have been fined 10.21 million yuan, 27 banned from industry, including 14 lifelong bans, and 3 institutions had their licenses revoked. These penalties mark the final stage of high-risk financial institution disposal and demonstrate the regulator’s “zero tolerance” stance.

On one hand, the industry is experiencing rapid growth; on the other, consumer rights are frequently harmed. Behind this contradiction is a reckless business model of some insurers prioritizing scale over compliance, as well as longstanding issues in the life and property insurance sectors.

Exaggerated returns and misleading sales are major trouble spots

In the past year, negative issues in the life insurance sector mainly focused on false advertising, exaggerated returns, and intensive regulatory penalties, with typical violations by leading companies reflecting compliance shortcomings during industry transformation.

Among these violations, Sunshine Life Insurance is undoubtedly a “negative example” from the past year. Public data shows that early in 2026, Sunshine Life received three administrative penalties totaling 350,000 yuan. A review of the entire 2025 shows this national life insurer received over 70 fines, totaling 6.843 million yuan, a 478% increase from 1.184 million yuan in 2024, with both the number of fines and total amount reaching a five-year high.

Their violations spanned core business areas and involved multiple levels of departments—from misleading sales and commission violations at grassroots branches to false reports and improper fund use at headquarters, with several senior executives involved. In January 2026, Sunshine Life’s Jiangxi branch was fined 310,000 yuan for failing to truthfully record insurance business matters and for false claims by employees; responsible person Pu Yang was banned from industry for 15 years. In August 2025, the headquarters was fined 2.21 million yuan for preparing false reports, mismanaging fund use, and misleading sales via telemarketing, with seven senior executives, including the compliance head, warned and fined a total of 700,000 yuan.

Source: Official website of the China Banking and Insurance Regulatory Commission

It is noteworthy that Sunshine Life’s violations are somewhat “disconnected” from its performance. In the first half of 2025, the company achieved a total premium income of 55.44 billion yuan, up 7.1% year-on-year; new business value was 4.01 billion yuan, a 47.3% increase; the number of effective customers exceeded 11.625 million, with steady growth in high-net-worth clients.

Industry insiders point out that this phenomenon of “stellar performance but compliance failure” reflects the development model of some life insurers that prioritize scale first and compliance second—frontline agencies take risks to meet performance targets, while headquarters’ compliance controls are virtually absent, ultimately harming consumer rights.

In addition to Sunshine Life, the most common negative issues in the past year’s life insurance industry remain exaggerated returns and misleading sales, especially in universal and annuity products with financial attributes. In April 2025, the China Banking and Insurance Regulatory Commission issued a notice on strengthening the regulation of universal life insurance, requiring that sales of such products reflect their insurance nature and prohibiting marketing that downplays the insurance protection aspect by only emphasizing “interest” or “expected returns.” Yet many insurers and agents still cross the line.

In July 2025, Zhuhai Central Branch of China-Italy Life Insurance was fined 174,000 yuan for false advertising during product presentations and misleading training of agents. Two middle managers were also fined. This case highlights that regulatory penalties target “training sources,” revealing systemic issues of fake training within insurance companies—misleading sales are not just individual agent misconduct but often systemic violations tolerated or orchestrated by management.

Source: Official website of the China Banking and Insurance Regulatory Commission

In August of the same year, Guangdong branch of China-Italy Life was ordered to correct deceptive practices and fined 220,000 yuan for deceiving policyholders; deputy general manager Zhang Yakui received a warning and a 70,000-yuan fine.

Additionally, Taikang Life has received multiple fines in recent years for “deceiving policyholders.” Public data shows that in December 2024, its Chongqing branch was fined 1.25 million yuan for fabricating business data, deceiving policyholders, and promising benefits outside the contract. In February 2025, Taikang Life’s Baishan branch in Jilin was fined 170,000 yuan for misleading sales and improper accounting. In December 2025, its Ningde branch in Fujian was fined 120,000 yuan for misleading sales and offering benefits outside the contract, with warnings and fines for responsible persons. In January 2026, the Shandong telemarketing center was fined 179,200 yuan for promising outside benefits and deceiving policyholders, with department head Li Changchun warned and fined 56,300 yuan.

Large fines are frequent, and property insurance giants are not immune

Compared to the misleading of returns in life insurance, the property insurance sector also faces serious issues. Over the past year, regulatory penalties have been unprecedented, especially targeting leading institutions, with multi-million-yuan fines common.

In February 2025, Taikang Online was fined 8.2336 million yuan and had 2.1 million yuan of illegal gains confiscated for violations including not strictly implementing policy terms and rates, selling life insurance without proper authorization, fabricating false reports, and mismanaging funds. The total penalty and confiscation amounted to 10.337 million yuan, with 12 responsible persons fined a total of 1.31 million yuan. Besides Taikang Online, companies like Dadi Property & Casualty and Zijin Property & Casualty were fined over 1 million yuan for issues such as financial data falsification and fictitious intermediary fees.

Source: China Financial Regulatory Commission official website

In October 2025, the China Banking and Insurance Regulatory Commission issued a notice on strengthening non-auto insurance regulation, clarifying the “report and conduct” integration requirement. However, fines throughout the year show many insurers were penalized for non-compliance. In April, Hu’an Property & Casualty’s Guangdong branch was fined 235,900 yuan for not using approved rates; Panyu branch was fined 300,000 yuan for fictitious labor costs and fake intermediary business. In December, Anxin Property & Casualty was fined 770,000 yuan for not using approved rates and for false claims data, with 14 responsible persons warned and fined, and five banned from entering the industry for 6 to 11 years.

Source: Official website of the China Financial Regulatory Commission

It is also increasingly clear that compliance differentiation among property insurers is intensifying. BYD Property & Casualty, leveraging direct sales to cut middlemen costs and eliminating high channel commissions, saw its comprehensive cost ratio drop sharply from 308.81% in 2024 to 102.49% in 2025, demonstrating effective compliant management. Conversely, Xinjiang Qianhai United Property & Casualty and Guangdong Energy Property & Casualty have cost ratios exceeding 200%, with Xinjiang Qianhai facing a vicious cycle due to structural issues and governance problems, with prominent compliance risks.

Public data shows that in 2025, 75 property insurers achieved a total premium income of 475.11 billion yuan, a 7.64% increase; net profit was 14.71 billion yuan, a 182.4% surge, indicating significant profitability improvement. However, some companies still pursue profits at the expense of regulatory red lines and consumer rights.

Over the past year, negative phenomena in the insurance industry reflect the pains of industry transformation, deviations in some insurers’ management philosophies, loopholes in agent systems, and insufficient consumer awareness. Consumers are most concerned about how to avoid pitfalls and protect their rights; the industry, meanwhile, needs to focus on standardizing operations and restoring consumer trust. (Produced by “Financial Weekly - Financial Matters”)

Disclaimer: The opinions expressed in this article do not constitute any investment advice. Investors operate at their own risk.