In late March, Beijing area network loan platforms successively received the "Fact Identification and Rectification Requirements" issued by Beijing Financial Bureau, marking the official opening of the rectification of Beijing network loan. The platform that received the rectification request cried bitterly, have said this move is "the strictest in history". Specifically, it includes bank deposit, risk reserve, publicity in the name of financial management, packaging sales in any form and self-financing in disguise.
Although the "one-size-fits-all" implementation of risk reserves in this rectification makes it difficult for many platforms to adapt to it, new alternatives have emerged, and performance insurance may replace risk reserves to enhance the credibility of platforms.
On the issue of risk reserves, rectification requirements show three points involving irregularities. They are to set up risk deposit, reserve fund, provision for security, or to publicize; Cooperate with the platform company to provide guarantee or promise to guarantee principal and interest in cooperation with the guarantee institution or insurance company with the same actual controller; The platform cooperates with guarantee institutions or insurance companies that are affiliated with it, but fails to truthfully and fully disclose information.
But it does not explain why risk reserves cannot be set up. In the opinion of the industry, this compliance rectification is to return P2P to its essence, and the platform only acts as an information intermediary. The risk reserve, which undoubtedly belongs to the behavior of credit enhancement, has a great impact on both the lender and the borrower, which is not the essential characteristic of information intermediary. Therefore, the risk reserve is prohibited.
Performance insurance, on the other hand, is a type of insurance owned by the insurer and is not associated with the platform in any way. This is very much in line with the meaning of the regulators, and whether to insure performance insurance depends on the autonomy of the platform.
Performance insurance means that the applicant (i.e., the borrower) fails to fulfill repayment obligations as agreed in the Loan Contract signed with the insured (i.e., the lender), and the applicant defaults on any installment of arrears by more than the period agreed in this policy, The insurer shall indemnify the Insured in accordance with the indemnity method stipulated in this Insurance Contract for the loan principal which should be repaid but not repaid by the Applicant and the corresponding interest as agreed in the Insurance contract. Simply put, it means that if the policyholder does not pay back the money, then the insurance company is liable for compensation.
The performance insurance of the insurance company can play a good endorsement role for the platform. First of all, insurance companies have strong background and capital advantages, which is a good confidence booster for the platform. Second, performance insurance is a valuable tranquilizer for investors, much as risk reserves used to be.
At the moment, platform interest in performance insurance is not high. The main reason is that at present, all platforms are busy with their own rectification. Apart from normal operations, platform rectification has made their internal departments "unable to find the north", and they have no time to pay attention to the problem of performance insurance. In addition, some platforms are not yet profitable, so it is undoubtedly a large expense to insure performance insurance for each investor. Considering the platform operation cost, performance risk is not attractive.
However, with the ban on risk reserves almost certain, performance insurance is certainly a smarter way for platforms to boost their credibility. Cloud Money Bag industry researchers believe that with the completion of industry compliance rectification and platform washing, the remaining large platforms will further consider the performance insurance. In the future, performance insurance may become standard in the P2P industry.
