(Yicai Global) Feb. 22 -- China will expand its pilot scheme for exclusive commercial endowment insurance nationwide from March 1, as the country’s top financial regulator is satisfied with the trial results.

The pilot scheme will be extended to cover the whole country from two pilot areas three months early because the development of the so-called third pillar of China’s pension system is urgent, the China Banking and Insurance Regulatory Commission said yesterday.

Zhejiang province and Chongqing city have piloted the scheme since last June.

The original six insurers, including People’s Insurance Company of China, China Life Insurance, and China Pacific Insurance, had underwritten nearly 50,000 policies with a total premium of CNY400 million (USD63 million) as of last month. Nearly 10,000 of the policyholders work in the new economy sectors such as couriering, ride-hailing, and food delivery.

All pension insurers will be able to take part in the expanded scheme, the CBIRC said.

China has a three-pillar pension system. Exclusive commercial endowment insurance and personal savings-funded endowment insurance belong to the third pillar. With flexible payment methods and a low starting threshold, the final pillar is targeted at new economy sector workers.

The third pillar is expected to grow rapidly as the first pillar -- the basic state pension -- is under strain because of an aging population. The second pillar includes corporate and occupational pensions.

The CBIRC also asked insurance companies that participated in the trial to continue to innovate products and explore more solutions to meet the diverse needs of people in new industries, new business formats, and flexible employment.

Expanding the pilot scheme will give more people access to exclusive commercial pension products, encourage insurers to explore the field, promote and standardize the development of the third pillar system, and better meet people’s multi-level pension needs, the CBIRC added.

For insurers participating in the trial, expanding the pilot scheme can increase business, dilute costs, and enhance incentives to develop the market, said Zhu Junsheng, research director of the China Insurance and Pension Research Center at the PBC School of Finance, Tsinghua University.

Editor: Futura Costaglione