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Amendments to the rules for the administration of foreign insurance companies



Shanghai Security News reporter got exclusive informed  from the relevant channel, in order to adapt to the new situation, the   revision work of the "Foreign Insurance Companies Regulations Implementation Rules" (hereinafter referred to as "Implementation rules")  will start in the near future.

The direction of the revision and this round of China's financial sector to accelerate the opening up of the content and the latest release of the "insurance Company Equity Management measures".

According to industry sources, the "Implementation Rules" of the revision may revolve around three main content: to promote foreign investment in the joint venture personal insurance Company's shareholding ratio limit, reduce joint ventures and wholly-owned insurance company Branch establishment threshold, as well as clear and standardized foreign insurance company equity change behavior.

First, the cap on the shareholding ratio of foreign capital in joint ventures will be adjusted from 50% in the past to 51%. This is also the insurance industry to accelerate the opening up of the measures in the key: the foreign-funded personal insurance company foreign shares were relaxed to 51%, 3 years later no longer set limits. The meaning behind the  breakthrough of the 1% is that foreign capital will grasp the right to control and power in joint venture insurance company.

Second, the joint venture and wholly-owned insurance company Branch establishment threshold or reduction, application procedures or simplification. According to the previous rules: where a joint venture or a wholly-owned insurance company is established with a minimum registered capital of 200 million yuan, the first application for establishment of a branch office in every province, autonomous region or municipality outside its place of residence shall be increased by not less than 20 million yuan of registered capital; If the foreign insurance company applies for setting up a branch office,

2 consecutive quarterly solvency conditions were sufficient before submitting the application. Industry sources, involving joint ventures and wholly-owned insurance companies to set up branches of the above-mentioned provisions or the amendment was canceled.

In recent years, with the growing scale of business, the majority of joint ventures, foreign-funded insurance companies have already registered capital of more than 500 million yuan, so "the registered capital 200 million when the opening of a branch office to be added 20 million registered capital" provisions, from the industry status quo does exist the necessity of modification. Finally, it is clear and standardize the change of shareholding of foreign insurance companies. In March this year, the CIRC issued the "Measures for the administration of equity in insurance companies", clarifying the rules before investing in insurance companies, the rules after becoming shareholders of insurance companies, and the regulation of equity supervision and management.

According to industry insiders, and it is consistent with the foreign insurance companies, the regulation of equity management is also the implementation of the rules of the revision of a major direction. The initial revisions are: "There are at least 1 normal insurers in foreign insurance companies as major shareholders," said the source. In the event of a change in equity, at least 1 normal insurers are the main shareholders after the change. The main shareholder of Foreign Capital Insurance Company shall not transfer the shareholding held within 5 years from the date of acquiring the shareholding. When the main shareholder of the foreign capital Insurance Company intends to reduce the shareholding or withdraw from the Chinese market during the share transfer, it shall fulfill the statutory shareholder's obligation, replenish the capital in time if necessary, and ensure that the insurer's solvency meets the requirements of the regulatory agency.

The "principal shareholder" mentioned above refers to a shareholder who holds a total capital of a foreign insurance company or a total of more than 50% of its shares, or a single largest shareholder, or a shareholder who does not hold a total capital or a total stake of 50% or more but has a significant impact on the management of the insurance company. In the industry's view, the implementation of the rules of the amendments to facilitate the further development of foreign insurance companies in China.

In particular, the establishment of branch offices to simplify the application procedures to meet the general demands of foreign insurance companies, foreign insurance companies are expected to invest in the layout of China will speed up.

Source: Shanghai Securities Daily 2018-05-16