Yongcheng Insurance Fined 1.47M Yuan for Four Violations, Health Insurance Underwriting Loss Hits 114M Yuan in H1

By Xie Meiyu | Editor: Fu Ying | Source: Unicorn Finance

Yongcheng Property Insurance Co., Ltd. ("Yongcheng Insurance") has once again come under regulatory scrutiny over compliance issues.

On September 16, the Shanghai Office of the National Financial Regulatory Administration (NFRA) publicly disclosed administrative penalties against Yongcheng Insurance. The company was issued a warning and fined 1.47 million yuan for four violations. Han Liang, then Assistant President and later Vice President, was simultaneously warned and fined 100,000 yuan. This marks at least the seventh penalty received by Yongcheng Insurance and its branches since 2026, and the largest single fine in the company's history.

Source: National Financial Regulatory Administration

Behind the penalties, Yongcheng Insurance's structural business problems are becoming increasingly clear: its health and accident insurance segment posted an underwriting loss of 114 million yuan in the first half of the year, while its power and energy business—which contributes over half of total premiums—faces the awkward situation of consecutive shareholder equity auctions. The question remains: how long can this power-sector-backed property insurer sustain its "electricity rice bowl"?

1. Four Violations Lead to Million-Yuan Fine; Vice President Han Liang Named

According to the administrative penalty information disclosed by the Shanghai Financial Regulatory Bureau, Yongcheng Insurance's violations include:

• Conducting insurance business outside its registered location
• Failing to use approved or filed insurance clauses and premium rates as required
• Inadequate internal controls over insurance business
• Lax management of underwriting authority for health and accident insurance

Yongcheng Insurance was warned and fined 1.47 million yuan. Han Liang, then Assistant President and later Vice President, was warned and fined 100,000 yuan.

Han Liang is a veteran at Yongcheng Insurance. According to his public resume, he was born in February 1973, is a member of the Communist Party of China, and holds a master's degree. Before joining Yongcheng Insurance, he served as Product Management Department Manager at Ping An Property & Casualty Insurance Chengdu Branch and International Business Department Manager at its Sichuan Branch. In February 2009, he became General Manager of Yongcheng Insurance's Sichuan Branch, transferring to Shandong Branch in June 2013. From August 2014, he concurrently served as Director of the Auto and Individual Insurance Customer Service Center, and from December 2014, also as Sales Director. In May 2016, he was approved by regulators for promotion to Assistant President of Yongcheng Insurance. In March 2024, Han Liang was further promoted to Vice President, a position he still holds.

Source: Canva

Yu Fenghui, a special researcher at the China Financial Think Tank, noted that the dual punishment of both institution and senior management sends a core warning to small and medium-sized insurers: compliance responsibility is penetrating from the corporate level to the individual level. This dual-penalty mechanism sends a clear signal to small and mid-sized insurers that compliance is not simply a cost that companies can settle with fines. The professional qualifications and career records of senior executives will be directly tied to compliance violations. For insurers with already imperfect governance structures, this means that executives must incorporate personal career risk into their decision-making when approving business, rather than simply executing company directives.

Looking at Yongcheng Insurance's executive structure, including Han Liang, the company currently has four vice presidents. The other three are Shao Lei, Shi Shaohua, and Feng Chunfang. Among them, Han Liang has the most complete public resume and the longest tenure within the Yongcheng system.

The President of Yongcheng Insurance is Sun Zengchan, born in April 1967. He previously worked at Ping An Property & Casualty Insurance, serving as Finance Department Manager at its Hebei Branch and General Manager of Langfang Central Sub-branch. After joining Yongcheng Insurance, he held positions including General Manager of Hebei Branch, Sales Director, Assistant President, Chief Financial Officer, and Vice President. He assumed the role of President in March 2024, ending an eight-year vacancy in that position. Sun currently also serves as the company's Chief Risk Officer and Deputy Party Secretary.

At the board level, Yongcheng Insurance completed the election of its fifth board of directors in May 2026. Wei Zhongqian was elected Chairman. Born in May 1976, he previously served as Finance Manager at Huaneng New Energy and Chief Accountant at China Huaneng Group Hong Kong Co., Ltd. He currently serves as Party Secretary and Chairman of Yongcheng Insurance.

Source: Canva

Notably, Yongcheng Insurance's executive team bears a clear "power-sector" imprint. Chairman Wei Zhongqian comes from Huaneng Group, Vice Chairman Liu Hulian comes from Shenzhen Energy Group, and Director Qin Zhenzhong was nominated by State Power Investment Group Capital Holdings Co., Ltd.

Since 2026, Yongcheng Insurance and its branches have received at least seven fines, totaling 2.685 million yuan. The other six fines were imposed on various local branches.

Details of the branch-level fines:

| Date | Branch | Violation | Fine | |------|--------|-----------|------| | Jan 2026 | Shaanxi Branch & Xi'an Central Sub-branch | Failure to use approved clauses/rates; false financial statements | 200,000 yuan & 270,000 yuan | | Jan 2026 | Xianyang Central Sub-branch | Untrue financial data | 160,000 yuan | | Feb 2026 | Jiangsu Branch | Reimbursing expenses through fictitious business and management fees | 210,000 yuan | | Mar 2026 | Dazhou Central Sub-branch | Changing business premises without regulatory approval | 40,000 yuan | | Mar 2026 | Weinan Central Sub-branch | Falsifying expenses to obtain funds | 125,000 yuan | | Jun 2026 | Jiamusi Central Sub-branch | Fabricating false financial materials | 210,000 yuan |

Additionally, in January 2026, Yongcheng Insurance's subsidiary, Yongcheng Insurance Asset Management, was fined 1.2 million yuan for non-standard asset management business practices, non-standard related-party transaction management, and inaccurate financial data. Relevant responsible persons were warned and fined a total of 180,000 yuan.

2. Health & Accident Insurance Posts 114 Million Yuan Loss in H1; Power & Energy Clients Drive 52.32% of Premium Income

Notably, "lax management of underwriting authority for health and accident insurance" was listed as one of the violations in the latest penalty. This segment was precisely the largest underwriting loss-maker for Yongcheng Insurance in the first half of the year.

Yongcheng Insurance's overall performance in the first half of 2026 was relatively strong. The company reported operating revenue of 3.885 billion yuan, up 2.3% year-on-year, and net profit attributable to shareholders of 156 million yuan, up 20.65% year-on-year. While premium scale grew steadily, the underwriting side remained profitable, with a combined ratio of 97.61%.

However, breaking down the business structure reveals challenges. In the first half of 2026, Yongcheng Insurance's health and accident insurance segment recorded insurance service revenue of 741 million yuan, up 8.33% year-on-year, but posted a loss of 114 million yuan, compared to a loss of 89.9726 million yuan in the same period of 2025.

Yu Fenghui believes there is a direct causal chain between lax underwriting authority management and the underwriting losses in health and accident insurance. Loose underwriting authority management means that branches and frontline staff have excessive autonomous decision-making space on the underwriting side, allowing high-risk targets to bypass headquarters risk control and enter the underwriting pool directly. Loss ratio失控 is an inevitable result.

In stark contrast, in the first half of 2026, property insurance revenue reached 1.599 billion yuan, with a profit of approximately 110 million yuan, making it the company's main performance pillar. Meanwhile, motor vehicle insurance revenue was 1.271 billion yuan, little changed from 1.217 billion yuan in the same period of 2025, with a profit of 38.9876 million yuan.

Source: Yongcheng Insurance Semi-Annual Report

Additionally, Yongcheng Insurance's semi-annual report noted that in the first half of 2026, premium income from power and energy clients accounted for 52.32% of total premium income.

Founded in 2004, Yongcheng Insurance was jointly established by China Huaneng Group and other large power enterprise groups and industrial investment groups. Headquartered in Shanghai, it is the only "power-sector" property insurer in China. Looking at the current shareholding structure, Yongcheng Insurance has 12 shareholders. China Huaneng Group Co., Ltd. holds 20% through its subsidiary Huaneng Capital Services Co., Ltd. and 7.9167% through Northern United Power Co., Ltd., controlling approximately 27.92% of shares in total, making it the company's actual controller.

In terms of related-party transactions, Yongcheng Insurance sold 1.887 billion yuan in insurance to related parties in the first half of the year. China Huaneng Group and its subsidiaries topped the list at 1.602 billion yuan. Sales to the fourth-largest shareholder, Shenzhen Energy Group Co., Ltd. and its subsidiaries, reached 112 million yuan. Sales to the sixth-largest shareholder, China Datang Group Capital Holdings Co., Ltd., and the seventh-largest shareholder, China Huadian Group Industrial & Financial Holdings Co., Ltd., both exceeded 50 million yuan.

Source: Yongcheng Insurance Semi-Annual Report

Yongcheng Insurance's "moat" in the power and energy sector is indeed substantial. In 2025, the installed capacity it underwrote accounted for over 40% of the national total installed capacity. The company holds a leading market share in domestic power generation-side insurance, and the loss ratio for power and energy risks where it serves as lead or sole underwriter is far below that of co-insurance business and market averages. The company also positions itself as a "little giant" in power and energy insurance.

However, Yongcheng Insurance's "power-sector" shareholders have frequently listed their equity stakes for transfer in recent years, with few takers.

According to public information, China Huadian Group Industrial & Financial Holdings Co., Ltd., China Datang Group Capital Holdings Co., Ltd., and State Power Investment Group Capital Holdings Co., Ltd. respectively listed their entire 7.6%, 7.6%, and 6.57% stakes in Yongcheng Insurance for transfer at the Beijing Equity Exchange in April 2024, August 2025, and November 2025. China Southern Power Grid Capital Holdings Co., Ltd. listed its 3.28% stake for transfer at the Guangdong United Equity Trading Center in December 2024. The total proposed transfer of shares exceeded 25%, but none of the transactions were completed.

Source: Beijing Equity Exchange

Yu Fenghui pointed out that Yongcheng Insurance's business is highly tied to shareholder resources. Multiple "power-sector" shareholders have repeatedly listed their equity for transfer. Although no transactions have been completed, their intention to exit is clear, indicating a trend of shrinking shareholder business. The insurer's response directions should be: first, proactively productize its professional underwriting capabilities in the power and energy sector and expand to non-shareholder power enterprises and new energy operators; second, resolutely reduce dependence on shareholder-related business.

Shareholder business is both Yongcheng Insurance's moat and its ceiling. The company needs to consider how to transform its professional underwriting capabilities in the power and energy sector into market-wide competitiveness. The interim losses in health and accident insurance and the密集 appearance of compliance penalties are both challenges and opportunities to accelerate business structure optimization and enhance independent operational capabilities.

Do you think Yongcheng Insurance should continue to deepen its focus on the power and energy track, or should it quickly shed shareholder dependence and pivot to market-oriented business? Feel free to share your views in the comments.

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