China regulators order end to smog insurance sales

[March 27, 2014]  SHANGHAI (Reuters) — Chinese regulators have told the country's two largest insurers to stop selling coverage against smog, a week after such policies were launched, the China Daily reported on Thursday.

The newspaper did not say why the country's insurance watchdog had ordered People's Insurance Company of China (PICC) and Ping An Insurance Group to cease sales of the coverage.

The country's worsening air quality is at the top of the list of concerns of China's leaders, anxious to douse potential unrest as a more affluent urban population turns against a growth-at-all-costs economic model.

PICC last week offered coverage to Beijing residents against health risks caused by air pollution in the city, promising to pay 1,500 yuan ($240) to policy holders hospitalized by smog. It also said it would pay 300 yuan if the city's official smog index exceeded the hazardous 300 level for five consecutive days.

Ping An had partnered with an online travel agency to sell pollution insurance to travelers that allowed them to get compensation of up to 50 yuan per day if they spent at least two days in a smog-filled city.

Both firms said policies that had already been sold would be honored, the China Daily reported.

Beijing's official air quality index (AQI), which measures airborne pollutants including particulate matter and sulfur dioxide, routinely exceeds 300, and sometimes hits levels higher than 500.

The capital is on the frontline of a "war on pollution" that Premier Li Keqiang declared earlier this month in a major policy speech. Beijing is choked by traffic and surrounded by the big and heavily polluted industrial province of Hebei.

($1 = 6.1781 Chinese yuan)

(Reporting by Fayen Wong; editing by Joseph Radford)

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