The China Insurance Regulatory Commission issued a notice in Beijing on Tuesday seeking public opinion on a draft regulation aimed at eradicating malpractice in insurance companies.

Under the draft, the watchdog will require insurers to submit a report every April 30 summarizing employee performance over the previous year, especially in respect to observance of industrial ethics and laws.

A special person - solely responsible to the general manager and top management - should be in charge of in-house disciplinary inspection, said the document.

Insurance companies should establish independent policies and measures to punish employees who dare to violate regulations. The commission will file these policies and measures, it said.

The notice alerted insurers to monitor employee behavior when it came to developing and publicizing new insurance products, dealing with customer complaints, guarantees and insurance fund investments, setting up new organizations or mergers, going public and settling claims.

"Employee malpractice will lead to financial losses, tarnish companies' reputations and invite punishment by industry authorities," it warned.

So far, 53 of the 82 Chinese insurers surveyed have established a special department to prevent in-house malpractice, said the notice.

Source: Xinhua