Hexindai Inc. announced that it signed a cooperation agreement on November 19, 2018 with Shanxi Zhengxuan Finance Guarantee Co., Ltd. to provide investors on the company's platform with insurance coverage that protects them against the potential default risk of non-paying borrowers (the Cooperation Agreement). Starting from December 1, 2018, all new loans facilitated on Hexindai's marketplace have required borrowers to obtain insurance through Shanxi Zhengxuan. Borrowers pay 4.5% and 0.5% of the principal amount to Shanxi Zhengxuan as insurance policy premium and service fee, respectively. If a default were to occur, Shanxi Zhengxuan will compensate the investor with an amount up to the loan residual principal and three months of accrued interest, in accordance with the terms and conditions of the Cooperation Agreement and the agreements between the borrowers and Shanxi Zhengxuan. Shanxi Zhengxuan files its default information with the Credit Reference Center, the People's Bank of China (CCRC), which is an independent credit information service provider under the People's Bank of China. The Center's mandate is to establish, operate and maintain a national centralized commercial and consumer credit reporting system. On January 14, 2019, the China Banking and Insurance Regulatory Commission issued a public report stating that it was imposing certain regulatory measures on Changan Insurance, the Beijing-based property and liability insurance company that had previously been providing liability insurance coverage to investors on Hexindai's platform, because Changan Insurance did not meet certain solvency and risk measures. Changan Insurance has been barred from writing new insurance policies, other than some automobile and liability insurance policies, and setting up new branches until it increases its capital.