Dajia Insurance's frontline operations have collapsed, while Sun Xianliang remains clear-headed at the executive level

A clash between out-of-control grassroots operations and clear-headed senior management is tearing apart Dajia Insurance’s compliance底线.

Recently, Dajia Insurance Group has been repeatedly criticized by regulators, drawing increasing market attention. On July 3, the Taizhou branch of the National Financial Regulatory Administration issued a penalty decision against Dajia Life Insurance’s Taizhou Central Branch, fining the company RMB 560,000 for financial data falsification and offering unauthorized concessions to clients.

(Source: National Administration of Financial Regulation)

But this is only the tip of the iceberg.

According to data from Duchuang Finance, the institution received a total of 11 penalties in the first half of this year. During the same period, Dajia Property & Casualty Insurance’s branches in Jilin, Henan, Shaanxi, and other locations were repeatedly reprimanded and penalized for issues including inflated expenses and submission of falsified documents. The string of penalties highlights underlying vulnerabilities in the company’s operational and management practices.

Under mounting compliance pressure, whether Sun Xianliang, the group’s executive leader, can untangle the web of risks, drive transformation in management models, and steer the company out of its governance crisis has become a focal point for the industry.

Eleven penalties in six months—Dajia Insurance’s reckless sprint

Dajia Insurance received a total of 11 penalties in the first half of the year—an exceptionally rare occurrence in the industry—directly reflecting persistently lax internal controls during the risk-resolution phase and an eroded compliance底线.

From an operational micro perspective, the misconduct by grassroots units relies on outdated tactics.Dajia Life Insurance’s Taizhou Central Branch was penalized for inaccurate financial reporting, while Dajia Property & Casualty Insurance’s branches in Jilin, Henan, Shaanxi, and elsewhere have fallen back on old habits like inflating expenses and fabricating false reports. These methods were already targeted by regulators a decade ago, yet some branches still resort to them to mask their difficulties—a clear sign of weak compliance awareness. Under today’s tightening regulatory scrutiny, such conduct not only damages reputation but also crosses regulatory red lines.

From a meso-management perspective, the widespread geographic distribution of violations is even more concerning.Problematic institutions stretch from Taizhou in Jiangsu all the way to Jilin, Henan, Shaanxi, and other regions, indicating a broad impact. If the issue were confined to a single locality, it could still be attributed to local management failures; however, the simultaneous occurrence of similar violations across multiple regions suggests systemic flaws in the group company’s overall management system.

From a macro-regulatory standpoint, the enforcement stance has become unequivocally clear.Under strict regulatory oversight enforcing the 'consistency between reported practices and actual conduct' principle, penalties have been issued intensively, reflecting a zero-tolerance approach toward financial misreporting and illegal commission rebates. While Dajia Insurance was not singled out arbitrarily, it has indeed become a prominent case targeted during this enforcement phase.

Behind these penalty notices lies regulators’ strong commitment to standardizing industry operations and safeguarding the baseline of financial compliance.

Disconnect Between Top-Level Strategy and Grassroots Execution

The core challenge facing Dajia Insurance lies in the significant gap between its top-level structural design and on-the-ground implementation at the grassroots level.

First,Although the group company has established a relatively comprehensive compliance management framework, this system struggles to take root effectively across its city- and prefecture-level branches. This results in a disconnect between compliance management and performance improvement, making it difficult for directives from senior management to permeate into frontline business operations.

Secondly,Grassroots institutions have long been squeezed by dual pressures—regulatory constraints and performance evaluations—leading some to breach compliance thresholds in pursuit of short-term business targets, thereby sacrificing the company’s hard-earned reputation and brand credibility built over years. Amid fierce industry competition, local outlets widely face existential operational pressures, with some resorting to illegal commission rebates or unauthorized extra-contractual incentives to meet their quotas.

Although this move may boost premium income in the short term, it actually undermines the company’s compliance foundation and brand reputation. If caught by regulators, the resulting damage to the company’s brand and operations would far outweigh any short-term performance gains.

Furthermore,Its internal control system exhibits clear regulatory gaps. Falsified financial data at the grassroots level has long gone undetected, reflecting deficiencies in the group’s internal audit and compliance oversight—specifically, a lack of comprehensive, routine, and penetrating supervision over frontline operations. This stems from inherent flaws in the group’s supervisory framework: excessive reliance on self-discipline at the grassroots level, insufficient on-site inspections and data sampling, and inadequate allocation of regulatory resources to cover all frontline business activities.

Finally,As the entity that assumed Anbang Insurance’s assets, the company remains constrained by legacy issues. Outdated business philosophies and operational models still persist at the grassroots level, and the organization is currently in a transitional phase regarding team restructuring and compliance culture development. These overlapping practical challenges have exacerbated compliance violations at the grassroots level.

Sun Xianliang Takes Office: Dajia Insurance’s Path to Compliance Breakthrough

On June 23 of this year, Dajia Insurance completed a change in its legal representative, with Sun Xianliang succeeding He Xiaofeng in the role.

(Source: Tianyancha)

This senior management reshuffle coincides with the company’s ongoing efforts to strengthen compliance. Appointing Sun Xianliang, who has prior regulatory experience, signals a deep-seated realignment of the company’s leadership.

Sun Xianliang, General Manager and Legal Representative of Dajia Insurance Group, comes from the banking and insurance regulatory system, giving him an instinctive sensitivity to policy boundaries and a thorough understanding of regulatory logic and market trends—thus granting him a distinctive advantage through a regulator’s perspective.

This trait indicates a fundamental shift in the company’s strategic direction—from prioritizing scale-driven competition to pursuing a balanced approach that emphasizes both compliance and profitability. While this strategic pivot may temper growth in the short term, it promises more stable and sustainable development over the long run.

Meanwhile, amid frequent operational risks, the new management team must first shift the focus of governance downward. They need to break the old habit of prioritizing performance over risk and extend risk controls all the way to the operational frontlines. This requires increasing the weight of compliance metrics in performance evaluations and implementing a 'one-strike veto' policy for violations, ensuring all employees recognize that the cost of non-compliance will always exceed any potential gains from misconduct.

Now, Sun Xianliang’s mission extends beyond merely resolving current compliance penalties; he must establish a long-term risk control framework. This involves strengthening internal audit systems, building a dynamic risk early-warning mechanism, and enforcing individual accountability—thereby breaking the vicious cycle of 'rectification–calm–recurrence' and ensuring the company operates legally and in full compliance.

Moving beyond 'wild growth,' compliance is now insurers’ true moat.

Dajia Insurance has received 11 regulatory penalty notices in the first half of the year alone—a trend that has sounded a risk alarm across the entire industry.

Today’s financial regulatory framework is becoming increasingly stringent, and compliant operations have become the foundation for insurers’ stable business performance. Business models that rely on financial statement fraud or improper commission rebates to achieve rapid growth will ultimately face severe regulatory penalties.

This case clearly demonstrates that short-term gains from non-compliant activities cannot offset the damage to brand reputation and the subsequent regulatory pressure. Peer institutions should take this as a warning and recognize that compliance is not an optional choice but a fundamental requirement for survival and success.

However, practices such as financial data manipulation and improper transfer of benefits directly harm consumer interests and erode the credibility of the entire industry.Therefore, compliant operations serve as the first line of defense in protecting consumer rights. Fabricated financial statements conceal operational risks, while improper commission rebates mislead consumer decisions—both practices are undermining market trust and hindering industry progress.

As the insurance industry enters an era of stock competition, the outdated, extensive growth model—relying on workforce expansion and cutthroat price wars—is no longer viable. Only by adhering to compliance, improving service quality, and innovating product offerings can the industry achieve high-quality, sustainable development.

As a representative case of risk resolution, Dajia Insurance’s remediation efforts not only determine its own future but also offer valuable lessons for the industry’s broader transformation. Whether the new management team can fundamentally reshape the company’s compliance culture will significantly impact market confidence.

Only by implementing compliance responsibilities rigorously throughout the organization and abandoning the mindset of pursuing profits through reckless expansion can Dajia Insurance overcome its governance challenges and set an example for compliant transformation within the industry.

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