China Adjusts Assumed Interest Rate Research Value for Life Insurance to 1.94%

China's life insurance sector has adjusted its quarterly assumed interest rate research value for ordinary life insurance products to 1.94%, according to the Insurance Association of China. This adjustment is part of a dynamic mechanism established in January 2025 by the National Financial Regulatory Administration to link insurance pricing directly with market interest rates. The mechanism requires life insurers to dynamically adjust their maximum assumed interest rates for ordinary and participating products, as well as the maximum guaranteed rates for universal life products, to mitigate financial risks.

The assumed interest rate is a core parameter in pricing life insurance products. Establishing a dynamic adjustment mechanism linked to market interest rates and publishing quarterly research values allows insurance pricing to be more flexible. This is a crucial regulatory measure to prevent systemic "negative spread" (interest margin loss) risks in the insurance industry and guide healthy development.

On July 21, 2026, the Insurance Association of China announced that the current research value for the assumed interest rate of ordinary life insurance products has been adjusted to 1.94% [6a5f78b2b7627b1f924952a6]. This latest figure reflects the ongoing operation of China's dynamic adjustment mechanism for life insurance pricing, which was first implemented in early 2025 to align insurance products with macroeconomic realities [6a5f78b2b7627b1f924952a6]. The newly released rate of 1.94% represents a minor uptick from the previous two quarters, though it remains significantly lower than when the mechanism was first introduced [6a5f78b2b7627b1f924952a6]. According to official data, the quarterly research values published since the system's inception demonstrate a gradual downward trend followed by a slight stabilization: - January 2025: 2.34% [6a5f78b2b7627b1f924952a6] - April 2025: 2.13% [6a5f78b2b7627b1f924952a6] - July 2025: 1.99% [6a5f78b2b7627b1f924952a6] - October 2025: 1.90% [6a5f78b2b7627b1f924952a6] - January 2026: 1.89% [6a5f78b2b7627b1f924952a6] - April 2026: 1.93% [6a5f78b2b7627b1f924952a6] - July 2026: 1.94% [6a5f78b2b7627b1f924952a6] The dynamic adjustment framework was officially launched in January 2025 under the direction of the National Financial Regulatory Administration (NFRA) [6a5f78b2b7627b1f924952a6]. The regulatory body issued the "Notice on Matters Relating to the Establishment of a Linkage and Dynamic Adjustment Mechanism Between Assumed Interest Rates and Market Interest Rates," which mandated the quarterly publication of these research values to serve as a benchmark for the industry [6a5f78b2b7627b1f924952a6]. Under this regulatory directive, life insurance companies in China are required to dynamically adjust the maximum assumed interest rates for both ordinary and participating (dividend-paying) life insurance products [6a5f78b2b7627b1f924952a6]. Additionally, they must adjust the maximum limit for the minimum guaranteed interest rates of universal life insurance products [6a5f78b2b7627b1f924952a6]. By linking these guaranteed returns to broader market interest rates, Chinese regulators aim to protect the financial stability of the insurance sector. The mechanism prevents insurers from locking themselves into high-yield guarantees that they may not be able to fulfill in a lower-yield macroeconomic environment, thereby mitigating systemic risk across the industry.