CHINA Law and Practice Contributed by: Fubin Xiang, Xinyi Zhang, Mengmeng Wei and Lanmengyuan Zhang, W&H Law Firm
new nuclear business in the world. Despite this, the market still relies heavily on international reinsurance, particularly for transferring risk outward and managing the total exposure. The key questions for insurers and reinsurers include design risk, serial defects affecting multiple units, operational delays, accumulation of risk at a single site, the boundary between nuclear and non-nuclear liability, and whether sufficient capacity is available at all. There have been no publicly reported cases on nuclear insurance claims in China; thus, insurers need to be careful regarding the allocation of risks in con- tract and policy wordings. 9. Legislative and Regulatory Key Trends 9.1 Regulatory Focus Areas and Supervisory Trends Regulatory focus has widened beyond financial compliance to claims handling, sales conduct, con- sumer protection, ESG issues and cybersecurity. The regulators are paying more attention to delayed payments, unreasonable declinature and mis-selling. As a result, insurers have to streamline their claims handling processes, standardise policy wording and improve anti‑fraud systems. This aims to reduce the complaints and litigation that used to arise from unfair claims handling and lack of transparency. At the same time, the focus has shifted to social responsibility, data compliance and cybersecurity, and environmental exposure in underwriting carbon‑intensive industries.
Failures in these areas carry regulatory penalties and reputational damage, and may also generate disputes with policyholders, investors and other stakeholders. Overall, the regulatory regime is tightening the space for non‑compliant conduct and steering the indus- try towards a more transparent and stable direction. Although compliance costs are rising, the risk of sys- temic disputes might fall as a result. 9.2 Forthcoming Reforms and Market Impact The most significant anticipated reform is the revi- sion of the PRC Insurance Law, which will be the first comprehensive revision since 2009. In September 2026, the National Financial Regulatory Administra- tion released a draft for public comment, which has introduced a series of significant changes to the cur- rent insurance law. For example, the draft clarifies and expands insurers’ duty of notice and explanation from traditional exclusion clauses to any clauses of signifi- cant interest that exclude or limit the insurers’ liability. As a result, insurers will need to exercise greater care in sales procedures. The Law also introduces changes to the claims pro- cess for liability insurance. Where insurance liability and joint liability arise together, the insurer shall com- pensate in accordance with the joint liability regime. Aside from these, significant adjustments have been made to insurance coverage, data security and regu- latory supervision. These changes reflect a continued regulatory focus on protection of policyholders and enhanced insurer compliance obligations.
76 I NSURANCE L I T IGATI O N 2026
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