Company: SDAWW
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036086
Chunk: 31

Company: SunCar Technology Group Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 31
---
 risk management and cooperation with third-party insurance intermediaries. In January 2019, the CBIRC promulgated the “ Notice
on Further Strengthening Regulation on Auto Insurance” to further regulate auto eInsurance market conducts including, among other
things, charging commissions. As recent as September 2, 2020, CBIRC released guidance of The Implementation of Comprehensive Reform of
Auto Insurance (CBIRC Supervision and Development No. 41 2020, hereinafter referred to as “ No. 41 2020 Guidance”), which took
effect on September 19, 2020, and set phased goals for insurance companies to “reduce price, increase insurance policy volume, and
improve quality”, which significantly reduced premium and commission rates. Any tightening of regulations or administrative measures
on insurance premiums or insurance agency commissions could have material adverse impact on the revenue and profitability of our auto
eInsurance business, if we are not able to increase our insurance business volume sufficiently to compensate for the reduced revenue generated
from auto eInsurance commission, or pass on any downward impact on our commission rates to our external referral sources.

Regardless, failure to comply
with any of the laws, rules and regulations to which we are subject could result in fines, restrictions on business expansion, which could
materially and adversely affect us. The laws, rules and regulations under which we are regulated may change from time to time, and there
is uncertainty associated with their interpretation and application. We cannot assure you that future legislative or regulatory changes
would not have a material adverse effect on our business, results of operations and financial condition.

Misconduct of the external referral sources
we engaged to promote our auto eInsurance services is difficult to detect and deter and could harm our reputation or lead to regulatory
sanctions or litigation costs.

We promote insurance products
through external sales representatives. In addition, we also engage them to deepen our market penetration and broaden end consumer reach.
The activities and regulatory compliance of these sales and marketing forces associated with our auto eInsurance business are subject
to the terms of the agreements we entered into with them and subject to applicable PRC laws. Misconduct of any of them could result in
violation of law by us, regulatory sanctions, litigation or serious reputational or financial harm. Misconduct could include:

  making misrepresentation when marketing or selling insurance to customers;                                                                                                  
  hindering insurance applicants from making full and accurate mandatory disclosures or inducing applicants to make misrepresentations;                                       
  hiding or fals