ZhongAn Online P & C Insurance Co., Ltd. recently received the Written Decision of Administrative Penalty of the National Administration of Financial Regulation (Jin Fa Jue Zi [2024] No. 1) (the Administrative Penalty) from the National Administration of Financial Regulation (the NAFR), pursuant to which the NAFR concluded after its inspection that, among others, in 2020, a subsidiary of the Company used the investment assets derived from the utilization of insurance funds to extend loans to others, which violated the relevant provisions of the Insurance Law of the People's Republic of China. As a result, Mr. Li Gaofeng (who is now one of the Company's executive directors, being the then vice-general manager), who was responsible for management, was subject to a warning and a fine of RMB 70,000.

The Company has conducted corresponding corrective measures in a timely manner after the inspection and will take this as a lesson to continuously enhance its legal and regulatory compliance. The Board considers that the Administrative Penalty has no material impact on the business operation and financial position of the Company.