Life insurance products should be more diverse to enhance risk control, said a senior insurance regulatory official.

Access to market, early intervention and fool-proof withdrawal mechanism are three prerequisites for preventing potential risks, said Huang Hong, vice-chairman of the China Insurance Regulatory Commission at a forum held in early September.

Premium income of life insurance companies reached 1.96 trillion yuan ($300 billion) from January to July, up 24 percent year-on-year, according to statistics released by the commission this month.

It shows life insurance plays an important role in guaranteeing financial safety, he said.

“However, products of some insurers are too homogenized with short duration, which may bring risk,” he said.

“Insurers should construct a multi-level and widely covered structure to help cultivate a healthy market.”

Since March last year, the commission had tightened sales of insurance products with medium or short duration.

Insurance whose duration is less than one year is not allowed at all. The proportion of policies with tenure of one to three years should be limited to 50 percent of the total by 2019, according to a document released by the commission.

It aims to guide insurers to adjust their business structure and develop long-term insurance, to prevent potential risks caused by asset-liability mismatches and insufficient cash flow of companies, the document said.

Huang also said insurance companies should optimize their ownership structure, improve incentives and risk control mechanisms.

The commission called on insurers to have self-examination procedures and course-correction mechanisms for risky behaviors in sales of life insurance, as stated in a document in May.

Self-examination should cover the management of insurance products, release of information, marketing communications, client reviews and complaint handling, according to the document.

The domestic insurance market witnessed steady development in the first quarter of this year with an optimized structure and stronger risk control capability, the commission said in May.

Its statistics showed total assets of the insurance industry reached 16.18 trillion yuan by March, up 7 percent from January.

The investment return on capital use of insurance companies showed a steady growth to 185.6 billion yuan, up 34 percent year-on-year, among which, more investments were made in infrastructural construction and the real economy, it said.

The balance of long-term equity and other investments accounted for 38 percent of total investments.

Huang said technological tools, including the internet, big data and artificial intelligence, should be adopted in innovation of insurance-related products, services and management.

In the first quarter of this year, the number of online deals grew 112 percent to 1.96 billion. Premium income of internet-based insurers reached 1.68 billion yuan, up 175 percent year-on-year, according to the commission.

In July, President Xi Jinping said at the National Financial Work Conference that finance is one of the country’s core competences, hence financial safety is an important part of national security－and the financial system is an important part of the foundation for economic and social development.

Making the financial sector better serve the real economy, containing financial risks and deepening financial reforms were the three issues that were highlighted at the conference.

Xi said financial supervision should be enhanced to improve the capability to withstand financial risks.

To do that, insurers and regulators should mitigate risks in key fields, improve defenses and optimize risk emergency and response systems, he said.

Any tendency to disturb the financial market should be contained. Trading and operation of financial works should meet the existing norms.

A social credit system should be strengthened and finance-related legal system should be improved in accordance with the nation’s development, he said.

The conference, which began in 1997, is convened once in five years, and is widely considered to be effective in setting the tone for financial reforms.