The China Insurance Regulatory Commission (CIRC) has issued “Document 134” last year which banned life insurers from selling universal life insurance as an add-on to regular life policies from October onward, resulting in a plunge in the new business value of the China insurance players in the first quarter. Yet, from the perspective of policy structure and profit margin, the implementation of “Document 134” will actually increase the proportion of protection-type insurance, which has a higher profit margin than wealth management products. In fact, recently announced second quarter results from several China insurance players have already shown a rebound in the value of new business. We anticipate the decline value of new business of China insurance players this year will be lower than market expectation. The impact of “Document 134” to the sector is expected to decline gradually amid the rapid business transformation into high-margin protection-type policies from low-margin wealth management products, which should lead to a sustainable industry development and enhance profit growth for the industry in the long run.