The logic of insurance sales bidding farewell to large marketplaces: "Daring to sell to everyone, daring to promote any product" will come to an end

Ask AI · How does insurance sales tiering change the industry’s extensive model?

In the past, consumers often complained that insurance only had “two no-compensations” — no payout here, no payout there; while industry insiders knew well that many disputes stemmed from “misalignment”: sellers who don’t understand, buyers who are confused. As long as a policy could be sold, it seemed anyone could push it, and even complex products dared to be promoted. Some industry insiders stated that currently, salespeople favor selling dividend insurance, but they haven’t fully understood the products themselves before starting to promote them to users.

On March 29, Beijing Business Daily reporter noticed that the China Insurance Industry Association recently released the “Self-Regulatory Code of Conduct for Insurance Product Suitability Management” (hereinafter referred to as the “Self-Regulatory Code”), which is attempting to break this decades-long extensive logic. This document not only provides norms for product tiering and personnel classification but also questions the industry’s core: when salespeople can no longer rely on “talking skills” to navigate the market, and when the money of 70-year-old elders is no longer casually “fooled” into high-risk policies, how should the insurance industry restore its proper image?

Farewell to “blind rushing”: five-level classification for sales “zoning”

A detailed normative document on “sales responsibility” is about to be officially implemented.

Recently, the China Insurance Industry Association officially released the “Self-Regulatory Code.” This not only implements the State Financial Supervision and Administration Commission’s “Measures for the Management of Financial Institution Product Suitability” but also represents a “bottom-up reconstruction” of the industry ecosystem. The regulation comprises nine chapters and forty-six articles, supported by five operational annexes, forming a comprehensive process norm system covering product classification, sales qualifications, customer assessment, matching sales, internal control management, and self-discipline supervision. The “Self-Regulatory Code” will take effect from July 1, 2026.

According to the “Self-Regulatory Code,” the insurance sales shelf has been reorganized. Previously, whether it was complex investment-linked insurance or simple accident insurance, they were all lumped together on the same “sales interface.” Now, personal insurance products are clearly divided into five categories: P1, P2, P3, P4, and P5, with property insurance also classified into two tiers. Specifically, P1 corresponds to insurance products with a coverage period of one year or less (including guaranteed renewals), such as life insurance, health insurance, accident insurance, etc. P2 includes ordinary personal insurance with a coverage period exceeding one year, such as life insurance, annuities, health insurance, accident insurance, etc. P3 covers dividend-type personal insurance, universal life insurance, and exclusive commercial pension insurance. P4 includes investment-linked personal insurance, variable annuities, etc. P5 refers to high-complexity personal insurance products with no guaranteed policy benefits and floating benefits.

This is not just a label but a threshold. Correspondingly, there is a “tiered authorization” for sales personnel: those with the lowest ability level can only sell basic products; only salespeople who reach the highest level (Level 1) can be “authorized” to sell the more complex, high-risk P4 and P5 products.

“The ‘Self-Regulatory Code’ establishes a unified industry standard for suitability management, ending the previous inconsistent standards across institutions. From product design, sales qualifications, customer assessment to internal control and supervision, it aims to fundamentally resolve risks of sales misguidance and product misalignment,” said Li Chao, an insurance lawyer at Beijing Shaohe Mingdi Law Firm, to Beijing Business Daily. For the market, the release of the “Self-Regulatory Code” will further promote the transformation of insurance sales from “product pushing” to “demand matching,” with professional ability becoming the core competitiveness.

More notably, this “ruler” begins to precisely measure the wallets of the elderly. The “Self-Regulatory Code” proposes a warm “firewall”: when insurance institutions sell P3 to P5 category insurance products to policyholders aged 65 and above, they should fulfill special due diligence obligations. This means that, when facing elders who clutch their pensions and have eyes full of longing for “high interest,” salespeople can no longer be vague. They must use large-font displays, voice prompts, on-site explanations, or even phone follow-ups to ensure the elders truly understand and are aware.

In fact, the glow of the normative document has already begun to flicker at the sales front. Beijing Business Daily reporter learned that some products have embedded suitability management into their processes. During the insurance application stage, the system requires customers to fill out an assessment questionnaire to evaluate their purchase purpose and financial capacity. If the system judges it as “not compliant,” the applicant can only choose to give up, re-evaluate, or insist on proceeding after full disclosure, with the entire process being recorded. This “lock-in” mechanism is reversing the past “sell first, evaluate later” approach into “no assessment, no transaction.”

The end of irresponsible sales: when “tricks” hit the wall of regulation

“Hello, this is the call from the Medical Insurance Service Team, because your medical insurance and social security costs have already been paid locally, right?” If you’ve received such a call, you are likely to be confused by the skilled customer service tone.

They don’t mention “insurance,” only “supplementary medical”; they don’t talk about “payment,” only “receiving electronic policies.” Even before consumers fully understand the situation, the other side has already tried to guide them to operate their phones, confusing them into buying one or two unnecessary insurance policies through vague language.

A more pitiful scene often occurs at bank counters. Mingxia (pseudonym) told Beijing Business Daily that for her father, the dream of returning home to build a house and retire was shattered the moment he signed his name. Originally, the plan was to deposit 50k yuan in the bank and live peacefully off the interest in old age. However, under the “high interest” talk of the bank staff, that deposit slip turned into a lifelong life insurance policy.

It wasn’t until the end of the year, when a card replacement was needed due to deduction issues, that Mingxia discovered the “secret.” The policy showed it was a lifelong life insurance requiring an annual payment of 50k yuan for five consecutive years. This meant that her father’s 50k yuan was locked for five years, and even after five years, the cash value of the policy was still below the premiums paid — he couldn’t even get back the principal. The sales pitch comparing it to “bank interest” and the promise of “withdraw anytime” now appears to be nothing but bait.

“Our family didn’t know about this; they (bank staff) were still hiding things, and they didn’t clearly inform the policyholder of the disadvantages,” Mingxia said. In the past, such cases often ended without resolution due to lack of evidence and difficulty in defining responsibility. But now, the newly issued “Self-Regulatory Code” is trying to put an end to such disputes.

Regarding these industry maladies, Gong Ge, co-founder and general manager of Zhongtuo Bang, pointed out sharply: “In the future, reckless selling will be very difficult. For example, telemarketing can’t start with a sale; the system will force a customer needs questionnaire first, and if the answers don’t match, the sale can’t proceed. When selling to elders in banks, if the premium is too high or the product too complex, the system will alert and force the use of large-font risk warnings and voice prompts, and may even require family members to be aware. This basically blocks the path of demand-ignoring, pushy sales.”

Industry insiders believe that if insurance companies strictly implement the “Self-Regulatory Code,” it can greatly improve sales compliance and help enhance the overall quality of consumer insurance purchases. Li Chao also emphasized that improper sales to the elderly via bancassurance channels may decrease or be avoided altogether. The release of the “Self-Regulatory Code” will reduce inducements that ignore customer needs, confuse product nature, or use borderline language to induce purchases.

Evolution: from “salesperson” to “family financial doctor”

When the era of “everyone can sell any type of insurance” ends, what kind of people does the industry need?

The answer may lie in the clearly defined tiered authorization. Future insurance sales will no longer be a simple “mass marketing” but a competition of “professional compounding.” Low-qualification salespeople will face elimination pressure, pushing the industry toward professionalism and refinement.

In the industry view, based on the product and personnel classification system, practitioners need to possess qualities similar to “general practitioners”: not only understanding insurance but also wealth management, health retirement, and even mobilizing medical and elderly care resources to provide clients with full lifecycle solutions. “Future insurance sales will be more like professional ‘family financial doctors’,” Gong Ge described. He told Beijing Business Daily that future salespeople cannot rely solely on rhetoric; they must first “diagnose” the family situation, income, and needs (via assessment questionnaires), then match products from the system. Sales relying on elderly deception or talk tricks will gradually be phased out, and the industry will value professionalism and integrity more.

This is not wishful thinking. According to Li Chao, based on the product and personnel tiered classification system, insurance sales will upgrade in the following ways: First, the sales process will shift from “product introduction” to “demand analysis and solution customization,” requiring salespeople to understand clients’ coverage gaps and financial status before recommending suitable products. Insurance institutions should focus more on full lifecycle services, shifting from single transactions to long-term relationship management, offering comprehensive solutions covering risk protection, wealth management, and health retirement. Second, salespeople need to continuously update their professional knowledge to gain higher sales authorization, promoting overall industry professionalism. Third, suitability management will be embedded into business processes, using technology to verify sales qualifications, check risk matching, and record procedures, with assessments shifting from purely performance-based to multi-dimensional evaluations of compliance, service quality, and customer satisfaction.

“Finally, services for special groups will be optimized, with more elderly-friendly designs, such as ensuring online sales processes are suitable, easy to use, and safe, giving more time for elderly consideration. For inclusive financial products, tiered product classification and simplified processes will make low-risk, basic protection products more accessible to ordinary consumers,” Li Chao added.

Of course, reform also requires meticulous “micro-operations.” Industry insiders remind that insurance products contain multiple functions, and consumer suitability management must be “refined product management.” Additionally, how to balance reasonableness and avoid harming genuine consumer needs in assessments will be a key focus for future technological optimization and industry exploration.

In any case, an era based on professionalism and trustworthiness is arriving. For consumers who have lingering fears from past sales misguidance, this will be a long-overdue “reputation restoration.” For the industry itself, this shift from “big marketplace” to “specialty store” will ultimately bring insurance back to its most fundamental essence: providing a definite sense of security when needed.