(Yicai Global) Aug. 13 -- Shares in ZhongAn Online P&C Insurance, China’s first online-only insurer, dropped for a second day in a row as regulators plan to tighten the rules governing internet-based insurance businesses.

Shanghai-based ZhongAn [HKG:6060] ended 4.4 percent lower today at HKD36.15 (USD4.64), after plunging 11.4 percent yesterday.

The China Banking and Insurance Regulatory Commission plans to rectify misleading and compulsory sales, inflated fees, rule-violating management and leak of users’ personal data, China Securities Journal reported yesterday. Since last year, the CBIRC has required insurers to screen their internet-based businesses and sort out their cooperation with third-party internet platforms.

Earlier this month, ZhongAn was fined CNY1.45 million (USD223,880) by the CBIRC for deceiving policyholders, failing to use the approved insurance clauses and premium rate, as well as formulating and providing fake reports, forms, documents and materials.

ZhongAn was established in 2013 through funds from Alibaba Group Holding, Tencent Holdings and Ping An Insurance. As China’s first online-only insurance company, ZhongAn may be particularly affected by these strengthened regulations, as around 80 percent of its premiums comes from third-party platforms such as Alipay and insurance brokerages.

ZhongAn’s premiums grew 14.2 percent to CNY16.7 billion (USD2.6 billion) last year, with 520 million insured users and more than 7.9 billion insurance policies. It swung to a profit of CNY550 million (USD84.9 million), becoming one of the top 10 property and casualty insurers in China.

Editor: Futura Costaglione