# Bought Insurance for a "Special Medication Card"? Watch Out for Major Losses! Regulators Urgently Halt Related Business, Industry Says Card Benefits Usage Probability Extremely Low, Less Than One in a Million

Recently, reporters from China Business News learned that the Hubei Regulatory Bureau of the China Banking and Insurance Regulatory Commission issued a notice to local provincial insurance branches, mentioning that some insurance companies have been giving away “special drug cards” and other benefit cards during insurance activities, which may involve offering benefits outside the contractual terms to policyholders or insured persons.

As competition in the insurance sales market intensifies, providing a wide variety of value-added services to customers has become an important way for insurance companies to attract and retain clients.

Industry experts point out that “special drug cards” are not official insurance products. They are often provided by third-party organizations and may involve marketing practices that confuse insurance responsibilities and mislead consumers. Timely regulatory intervention can curb illegal behaviors such as offering benefits outside the contract, resolve disputes and market risks caused by “special drug cards,” and guide insurance companies to operate in compliance.

“Special Drug Cards” Used as Marketing Tools to Attract Customers

Recently, the Hubei Regulatory Bureau of the China Banking and Insurance Regulatory Commission issued a “Reminder Letter on Regulating the Use of ‘Special Drug Cards’ and Other Forms of External Benefits in Insurance Activities” (hereinafter referred to as the “Reminder Letter”). During regulatory work, it was found that some insurance companies have been giving away “special drug cards” and other benefit cards to consumers, which may involve offering benefits outside the insurance contract.

The “Reminder Letter” requires all insurance companies within the jurisdiction to conduct self-inspections immediately, thoroughly check whether their branches at all levels are giving away “special drug cards,” “CAR-T cards,” or other benefit cards, and whether they are providing benefits outside the contractual scope. Any such behaviors must be stopped immediately, and efforts should be made to resolve disputes and prevent risks. Additionally, companies should strengthen internal controls, enhance compliance training, strictly manage personnel and channels, and resolutely prevent the procurement and use of these benefit cards for insurance activities.

“Special drugs” generally refer to high-cost, effective medications used to treat serious illnesses such as cancer and rare diseases. “CAR-T” (Chimeric Antigen Receptor T-cell therapy) is an innovative immunotherapy that uses the patient’s own immune system to target and treat tumors.

Long Ge, Deputy Director of the Center for Innovation and Risk Management at the University of International Business and Economics, told China Business News that many insurance institutions use the giveaway of “special drug cards” as a customer acquisition and retention strategy. The high coverage limit of tens of thousands of yuan for “special drug cards” makes them highly attractive, reducing the difficulty of acquiring customers and increasing customer stickiness.

However, in practice, the probability of actually using the benefits of “special drug cards” is extremely low. The proportion of people who can truly access related drugs or CAR-T therapy subsidies is less than one in a million. This is because these drugs are only applicable to serious illnesses like cancer and rare diseases, which are inherently niche populations. The combined effect of disease prevalence and actual usage rates of these drugs further reduces the likelihood of benefits being realized.

Many consumers report that some insurance agents promote the purchase of insurance by heavily advertising the free giveaway of “special drug cards,” emphasizing the “high value” of benefits such as expensive drugs and CAR-T therapies to attract policyholders. This marketing approach can easily mislead consumers into believing that these drug benefits are an extension of the insurance coverage they purchase, assuming that the insurance company will fully cover the costs. Unaware of the actual rules and potential risks of the cards, consumers are often swayed by this “additional benefit” and decide to buy insurance.

Linking Benefit Cards to Insurance Companies Can Lead to Disputes

A search on shopping websites by China Business News found that many third-party organizations are selling “special drug cards.”

For example, a ten-year “special drug card” costs 398 yuan and covers 90 domestic and 30 overseas special drugs. The direct payment limits include 2 million yuan for domestic drugs, 1 million yuan for overseas drugs, and 1.2 million yuan for CAR-T therapy, totaling 4.5 million yuan. Notably, the card design includes drug scope, age limits, waiting periods, health disclosures, and direct payment ratios, making it similar in form to insurance products.

The Hunan Regulatory Bureau of the China Banking and Insurance Regulatory Commission stated that providers of “special drug cards” and “CAR-T cards” are third-party organizations that lack the qualification to operate financial services. These products imitate insurance contract terms and payout responsibilities, which can lead to disputes between consumers, third-party organizations, and insurance companies.

By the end of 2024, the Henan Regulatory Bureau had issued a notice to local life insurance branches prohibiting the use of “special drug cards” and similar external benefits in insurance activities. The notice emphasized that providers of these benefit cards are third-party organizations with limited scale and strength, lacking financial operation qualifications, and their products mimic insurance terms and payout responsibilities, increasing the risk of disputes.

According to Long Ge, the regulatory actions taken by various local authorities to stop the illegal giving of “special drug cards” are part of normal market regulation and orderly maintenance. These “special drug cards” are not official insurance products nor compliant value-added services signed by insurance companies. They are mostly provided by third-party organizations without insurance backing, and their marketing often confuses insurance responsibilities and misleads consumers.

In response, the Hubei Regulatory Bureau further clarified that insurance companies must strictly follow regulatory requirements, standardize operations, strengthen agent management, and prohibit giving away benefit cards to consumers during insurance activities. It is forbidden to purchase, stockpile, or distribute benefit cards for solicitation, policy issuance, or follow-up visits. During product promotion and explanation, linking benefit cards to insurance companies or misleading consumers into believing that the benefits are provided by the insurer is strictly prohibited. It is also forbidden to conflate the claimed benefits of drug subsidies or expense reimbursements with the insurer’s coverage responsibilities, to avoid exaggerating insurance obligations and deceiving consumers.