On September 30, 2025, China’s National Administration for Financial Regulation introduced a new framework to enhance oversight of non-auto insurance lines, including property, liability, engineering, financial lines, domestic credit and surety, and marine. The regulation aims to reinforce market discipline and promote transparency in an increasingly competitive and rapidly expanding insurance sector.
As part of this broader regulation, cash before issuance/cash before cover (CBC) has been implemented nationwide starting November 1, 2025. Effective November 1, any newly incepted policy requires premium payment in advance, either before issuance or before coverage becomes effective, pursuant to the applicable cash before issuance or cash before cover provisions.
While this marks a significant regulatory shift, it’s important to note that each province’s local regulator is responsible for formally announcing and operationalizing the change. As a result, regional variations in implementation are expected.
The CBC requirement introduces new complexities to China’s billing and policy issuance process. Delays in local draft approvals may postpone invoicing and premium remittance, which can directly impact coverage timelines. As such, many multinational carriers are moving to treat China renewals as cash before cover.
To ensure compliance and avoid disruptions due to China’s new insurance regulation, businesses should consider the following best practices:
Secure coverage early. Begin binding China coverage well in advance to prevent delays in policy activation.
Evaluate payment structure. Transitioning China invoices to local payment can help avoid delays associated with central payment confirmation and coverage inception.
Understand provincial and carrier differences. Confirm the province of issuance, as local regulations may vary significantly. Additionally, be aware that local carriers and fronting partners may interpret the new law in varying ways in the short term, which could impact implementation.
Lockton Global Solutions stays ahead of changing insurance regulations around the world and has been working with our local stakeholders on this issue since its onset. For more on how you can stay informed and ensure compliance to protect your assets and operations, please contact our team.