China Cuts Dividend Insurance Illustration Rate Cap to 3.5% From 3.9% Starting July 1

The maximum illustrated rate used in sales materials for dividend-paying life insurance products in China will be lowered to 3.5% from 3.9% starting July 1, according to 36Kr. Insurers must complete filing changes for products showing rates above 3.5% by June 30, or submit them for delisting. As the deadline approaches, marketing copy on social platforms has promoted “imminent rate cuts” and “last chance” messages. 36Kr said research found the adjustment does not change the interest rate stipulated in policy contracts for dividend insurance, meaning it may not necessarily reduce consumers’ actual returns, but is more likely to curb overly aggressive sales illustrations.