The Chinese parent company behind WeChat and QQ is facing disciplinary action from Beijing.
Chinese tech giant Tencent owns an insurer called WeSure insurance, which lets consumers purchase various forms of coverage online. They can make these purchases via QQ or WeChat, the company’s social media networks.
That insurer has been slapped with a fine for running a marketing campaign that was misleading.
The fine is a reflection of Beijing’s determination to firmly regulate the largest internet market in the world. That said, the fine against WeSure insurance was only 120,000 yuan ($17,293), which is essentially a slap on the wrist to the mega-giant company that owns it.
The misleading marketing campaign was run at a time in which online health care coverage was skyrocketing in China due to the COVID-19 pandemic crisis. Tencent was accused of attempting to boost demand for its coverage products by claiming that it was placing a limit on the number of policies that would be made available. This, according to a China Banking and Insurance Regulatory Commission notice posted online at its Shenzhen office at the start of the week.
The marketing for the WeSure insurance products were misleading in a number of other alleged ways.
According to the notice, the insurer replaced the typical button to “enrol” in coverage with one that was marked as “collect”, instead. This ad was placed on a mobile website for hospitalization insurance applications. Moreover, Tencent’s online coverage platform did not offer consumers with guidance regarding truthful disclosure of health conditions.
According to the regulator, the fine issued to the insurer was based on Chinese insurance law, which stated that deceitful behavior toward insurance applicants is prohibited.
That said, according to the insurer, it had already corrected the issues of which it had been accused and that the changes were made last November. Still, it stated that it would continue its quality control efforts on its platform. This was published in a statement issued by the company.
The disciplinary action against WeSure insurance is only the latest in a broad effort China is making to manage its rapidly growing coverage industry. This took off from a single state-controlled insurer to a massive market of 82 general insurance companies and 90 life insurers.