China’s insurance watchdog has come out against the “love insurance” products sold online in the country, labelling them as “fake” policies.
The mainland’s many such quirky online insurance policy peddlers do not have the authorisation to sell these products. Customers who buy such policies might make a certain amount, usually several times their initial payment, if they successfully predict how long a couple will date.
In a post on its website on Monday, the China Insurance Regulatory Commission named one such policy concerning popular Chinese teen idol Lu Han, whose recent announcement about a relationship led to a rare breakdown of the servers at social media platform Weibo. Tens of thousands of his heartbroken fans left messages expressing their disappointment over him not being available any more.
“These ‘love insurances’ involving celebrities are not insurance products as they do not meet the requirements listed in China’s Insurance Law,” said the commission.
Internet companies are increasingly using Chinese youngsters’ craze about entertainment events and personalities as a marketing tool to promote their products and services. In 2014, the so-called night owl insurance, valid for 30 days during the Fifa World Cup in Brazil, drew rave reviews from among the mainland’s internet users.
The insurance product covered medical and emergency expenses for soccer fans who might push themselves to the limit during late-night matches for 3 yuan (46 US cents).
When Lu Han announced his relationship in a Weibo post last year, some Taobao shops rolled out a “Lu Han love insurance” priced at 11.11 yuan per policy. Purchasers could get double their money if he was still dating his girlfriend a year later.
The Communist Party mouthpiece People’s Daily said in a commentary last month that “love insurance” and similar products were something akin to gambling, rather than insurance policies.
The tone taken by the newspaper was viewed as a sign that the regulator would step in to clean up the online insurance market, where only a handful of players such as ZhongAn Online Property and Casualty Insurance are licensed to do business.
“China’s financial market is still a regulated market, with authorities playing a powerful role in judging the legality of businesses,” said Wang Feng, chairman of Shanghai-based financial services company Ye Lang Capital. “The joke type of products such as ‘love insurance’, although describing themselves as innovative products, will be eradicated sooner or later.”