No, insurance companies are not allowed to fail. The establishment of an insurance company requires assets of 200 million RMB, 70% of which is supervised and managed by the CIRC. In addition, the operating modes of insurance companies also include: national debt, savings, economic investment allowed by financial securities, etc. Therefore, after the establishment of an insurance company, its operation must be profitable, so it is unlikely that the insurance company will basically close down. If the insurance company does not operate well, the insurance company will choose to merge. In addition, the CIRC has the right to stop the business of this insurance company until there are enough funds to enable this insurance company to operate again. If it cannot continue to operate within a certain period of time, the court will declare it bankrupt. If an insurance company is declared bankrupt by the court, all its business will be represented by another insurance company designated by the CIRC to continue its after-sales service or go through the formalities of surrender.
Legal objectivity:
Enterprise Bankruptcy Law Article 7 Under the circumstances specified in Article 2 of this Law, the debtor may apply to the people's court for reorganization, reconciliation or bankruptcy liquidation. If the debtor is unable to pay off the debts due, the creditor may apply to the people's court for reorganization or bankruptcy liquidation of the debtor. If an enterprise as a legal person has been dissolved but has not been liquidated or its assets are insufficient to pay off its debts, the person liable for liquidation according to law shall apply to the people's court for bankruptcy liquidation.