Related stories

Implementation Measures of the "Rules of the People's Republic of China on Customs Protection of Intellectual Property Rights" Zheng Jian Fa [2004] No. 67 -- Notice of the China Securities Regulatory Commission on Several Issues Concerning Regulation of Overseas Listing of Companies Affiliated to Domestic Listed Companies Order No. 31 of the State Administration of Radio, Film, and Television (SARFT) - Provisions of Administration on Sino-Foreign Joint Films Production (the Provisions) Measures on Administration of Connected Transactions Between Commercial Banks and Interior Personnel and Shareholders Provisional Rules on the Administration of Foreign Enterprises Engaging in Design Activities for Construction Projects within the People's Republic of China (the "Rules")

Regulations on Administration of Insurance Companies

Insurance

保险公司管理规定

Regulations on Administration of Insurance Companies

Issued: May 13, 2004

Effective: June 15, 2004

Issuing Authority: China Insurance Regulatory Commission (the "CIRC")

Main Contents: Compared to the previous Regulations on Administration of Insurance Company promulgated by the CIRC on January 13, 2000, and amended on March 15, 2002, substantial changes have been made primarily in the following areas:

Establishing an insurance company: A unified standard now applies to all insurance companies regardless of whether they operate nationwide or only in certain regions.  The minimum registered capital has been set at 200 million yuan.  Various changes have been made relating to the two phase application procedure to establish an insurance company.

Establishing branches of an insurance company: An insurance company is required to establish a branch in order to operate in a province, autonomous region, or municipality directly under the central government outside its current domicile.  Provisions stipulate the conditions under which and the amount of additional capital that needs to be injected per application for each branch.

Approval of changes in an insurance company: The regulations specify which changes still need CIRC's approval and which just need its agreement or to be reported for filing.  For deregistration and merger of branches of insurance companies there are provisions for stricter control so as to strengthen the protection for insurants. 

Shareholding in an insurance company: With the exception of insurance holding companies or insurance companies approved by the CIRC, individual legal persons or other entities (including their affiliates) shall hold no more than 20 percent of the total share capital of an insurance company (including listed insurance companies), which is much higher than the 10 percent limit the CIRC previously adopted in practice. 

The total foreign capital held by foreign shareholders, which shall be qualified financial institutions, shall be no more than 25 percent of the total share capital of an insurance company. The investment shall fall under the administration of relevant rules on foreign-invested insurance companies if the above limit is exceeded. The above requirements do not apply to foreign shareholders investing in a listed insurance company.

Business scope, trans-regional operation, insurance terms and rates: Short-term health insurance and insurance for unexpected injuries have been added to the business scope of a property insurance company.

Branches of an insurance company are only permitted to do business in their place of domicile.  The insurance terms and premium rates used by an insurance company can be determined by the company itself rather than the CIRC and only need to be submitted to the CIRC for approval or filing.  Insurance associations are permitted to issue standard templates of insurance terms and announce guiding insurance rates.

中华人民共和国外资保险公司管理条例实施细则

Implementing Rules of the Regulations of the People's Republic of China on Administration of Foreign-Invested Insurance Companies (the "Rules")

Issued: May 13, 2004

Effective: June 15, 2004

Issuing Authority: CIRC

Main Contents: These Rules are promulgated as a supplement to the Regulations of the People's Republic of China on Administration of Foreign-invested Insurance Companies issued by the State Council on December 12, 2001.

Clear stipulations are provided that foreign ownership in a life insurance joint venture ("JV") directly or indirectly held by foreign life insurance companies shall not exceed 50 percent of the total share capital of the JV.

To establish a foreign-invested insurance company (the definition of which in these Rules also includes branches), the minimum registered capital or operating capital is 200 million yuan. For foreign-invested insurance companies that are already established but have less than the aforementioned capital, they must contribute additional capital to make up the difference within the two years after the Rules take effect.  If they fail to do so, the CIRC will reject their future applications to start new businesses.

Detailed regulatory provisions are set out for establishment of branches by foreign-invested insurance companies, including provisions for mandatory increases in registered capital under certain circumstances.  In addition, detailed procedures for dissolution, liquidation, and cancellation of foreign-invested insurance companies are clearly provided.