CIRC Fines Ctrip Insurance Agency USD45,000 for Withholding Product Details

CIRC Fines Ctrip Insurance Agency USD45,000 for Withholding Product Details

Liao Shumin

Date: Wed, 12/06/2017 - 15:20 / source:Yicai
CIRC Fines Ctrip Insurance Agency USD45,000 for Withholding Product Details
CIRC Fines Ctrip Insurance Agency USD45,000 for Withholding Product Details

(Yicai Global) Dec. 6 -- A unit of Chinese online travel service firm Ctrip.com International Ltd. [NASDAQ:CTRP] received a warning and a CNY300,000 (USD45,000) fine from China’s national insurance watchdog for failing to disclose the underwriters and sales agencies of insurance products offered on Ctrip’s website.

The China Insurance Regulatory Commission’s (CIRC) Shanghai branch issued a decision punishing Ctrip Insurance Agency Co. and hitting Ctrip’s legal representative with a CNY100,000 penalty on Dec. 1.

Ctrip’s webpage displayed a list of all the insurance products’ terms, conditions and filing record numbers on its order confirmation page, without specifying which ones applied to a selected product, the decision said.  

Founded in July 2011 with CNY50 million of initial registered capital, Ctrip Insurance Agency’s legal representative is Li Xiaoping. Its shareholders include Shanghai Ctrip Business Co. and Ctrip Computer Technology Co.

Many other online travel agencies (OTAs) such as Suzhou Tongcheng Travel E-Commerce Co., Tuniu Corp and Shanghai Joyu Culture Communication Co. bundle insurance products with flight and train tickets.

Ctrip’s insurance sales subsidiary provides a diverse range of products in partnership with insurers, covering air travel accidents, flight delays and flight ticket refunds.

Insurance products have become the ones most commonly packaged with OTA services. Companies with popular sales platforms can mark them up and profit from commissions.

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