(Yicai Global) Jan. 18 -- China’s leading on-demand food delivery firm Meituan is to shut down its mutual aid platform, which offers financial aid for medical treatment by getting members to club together and share expenses equally, as regulators toughen their stance on the overextension of internet-based giants into peripheral fields that lack regulation.

Meituan Huzhu, which opened for business 18 months ago, will close at midnight on Feb. 1 and will refund all monies paid by members, the Beijing-based firm said on Jan. 15. Meituan Huzhu has helped 382 patients and shared expenses 18 times, it said. The closing will allow Meituan to focus on its primary businesses of meal deliveries, bike sharing and other services, it added.

Online mutual aid is a form of insurance although the platforms claim to act as intermediary services, said Xiao Sa, partner of Beijing-based Dacheng Law Offices.

Operators do not have a license to practice insurance and as a result pose a risk to stakeholders, the country’s banking and insurance regulators said last September. They have a large number of members, can gather a huge amount of idle funds, but there exists no regulation to govern them as well as solve compensation and other issues.

Fierce competition has also led to smaller players dropping out, Tianfeng Securities said in a research report. Just over 100 million people shared medical expenses on fintech giant Ant’s Xianghubao last month, a drop of 1.74 percent from November and a decline for the second month in a row.

Internet giant Baidu closed its private insurance scheme Denghuo Huzhou in August last year, less than one year after opening. It had 440,000 members at the time.

Editors: Dou Shicong, Kim Taylor