Ant Group’s mutual aid health-care platform Xianghubao will cease operations from January 18, 2022, following similar moves by other internet giants, including Meituan and Waterdrop Inc. The closure is the latest of its kind amid China’s crackdown on the fintech business.
Xianghubao said that existing members wouldno longer be able to bear claims settlement costs. The funds originally deducted on Tuesday and the subsequent two phases of funds in January 2022 will all be borne by Xianghubao.
In addition, sick people who were first diagnosed in the hospital before 24:00 on January 28, 2022 and were in the mutual aid program at the time of diagnosis can still apply for mutual aid within 180 days from the date of first diagnosis in the hospital. All approved funds will be borne by the platform itself.
Xianghubao, which uses crowd funding to help pay medical costs for critical illnesses, was launched through Alipay’s main platform on October 16, 2018. Signing up was free, but all members shared the medical costs of those who fell ill. Xianghubao accumulated more than 100 million registered users, providing aid to about 180,000 sick people over the last three years.
The industry has been under scrutiny since last year as regulators tighten up on financial businesses of online platforms. Internet mutual aid platforms often share the same features of commercial insurance brokers but are not regulated. Regulators see their risks are “not negligible” as they often have huge numbers of users, the China Banking and Insurance Regulatory Commission (CBIRC) said in a policy research paper posted on its website in September 2020. The CBIRC suggested that all online financial activities must be overseen and licensed by regulators.