China - CBIRC To Strengthen Consumer Complaint Handling In Banking & Insurance Sectors

Legal News & Analysis - Asia Pacific - China - Banking & Finance - Insurance & Reinsurance

14 May, 2019


On 5th may 2019, the China Banking & Regulatory Commission (CBIRC) published a discussion paper seeking comment on proposed draft regulations ‘Regulations Concerning Strengthening of Consumer Complaint Handling Within the Banking & Insurance Sectors’ (Draft Regulations).  Key points contained in the Draft Regulations are:


  1. In principle, consumer complaints in the banking and insurance sectors (‘Consumer Complaints’) should be processed, determined and responded to within 15 days of receipt of such Consumer Complaint.  In special circumstances, this 15 day response period may be extended up to 30 days.  Should external entities (‘Out-Sourced Providers’) be involved in the appraisal, reviewing or assessment of a Consumer Complaint, then the time required for such Out-Sourced Providers work will not be included in this 15-30 day timeframe.
  2. At least semi-annually, banking and insurance entities should run analyses seeking to identify the main reasons triggering broad categories of Consumer Complaints, and make such analyses available to internal departments and subsidiaries, with the aim of achieving expeditious rectification of factors leading to Consumer Complaints.  In circumstances where the processing of a Consumer Complaint reveals breaches of law or regulation by the bank or insurer, then such bank or insurer is obligated to sheet home responsibility and liability to individual, named, officers within their organisations who have caused such breach.
  3. Banks and insurers must establish systems and protocols allowing for the simple lodgement and processing of Consumer Complaints.  All records associated with the handling of a Consumer Complaint must be retained by the bank or insurer for a minimum period of 5 years.
  4. Banks and insurers should draw up contingency plans for dealing effectively and appropriately with large-scale and severe Consumer Complaints (Materially-Damaging Complaints), including consumer class actions.  Materially-Damaging Complaints could be triggered by (i) natural disaster, public security incident or public health incident; (ii) media reporting leading to mass consumer response; (iii) 50 or more consumers joining a consumer class action; (iv) any Consumer Complaint that purports to carry a contractual valuation (loss) of more than RMB 10 million; or (v) any other circumstance so deemed by CBIRC.
  5. Banks and insurers must include performance assessment clauses in their service level agreements with third party Consumer Complaint Out-Sourced Providers, with such clauses allowing the bank or insurer to terminate and withdraw from arrangements with Out-Sourced Providers in the face of poor performance by such Out-Sourced Providers.



For further information, please contact:


Michael Cripps, Partner, Clyde & Co

[email protected]