A draft decision has already been issued to help clarify the changes that may take place.
China’s insurance regulator has released an exposure draft regarding the rules applied to foreign insurance companies doing business in the country.
The draft is meant to provide clarification of the access standards for insurers from other countries.
The standards apply to foreign insurance companies in addition to overseas financial institutions. The details of the draft were released in a document with the title “Decision on Amending Regulations on the Administration of Foreign-funded Insurance Companies in the People’s Republic of China (Draft for Solicitation of Comments)”.
The changes within the draft have yet to be implemented. They remain in the proposal phase and are also meant to provide fine-tuning to the requirements for shareholder changes. It would also dump the old foreign ownership ratios, explained the China Banking and Insurance Regulatory Commission (CBIRC) regulator.
The new rules for foreign insurance companies could smooth out some rough edges to old regulations.
According to the draft, if an insurer funded by a foreign source changes its shareholders, and the proposed successor or transferee is also a foreign insurer or foreign insurance group, then it will be required to comply with all the applicable requirements within the CBIRC’s Regulations in addition to implementing the rules.
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Furthermore, if an overseas financial institution of some form that is not an insurer or insurance group becomes a shareholder of that foreign funded insurer, then they will be required to comply with the “Measures for the Administration of the Equity of Insurance Companies.”
According to the CBIRC, there will not be any additional new market access conditions. Moreover, it also underscored that the new regulations would not add any new entry barriers. It stated specifically that both Chinese and foreign insurers would be able to conduct business in the country under the same regulations.
The revised rules for foreign insurance companies are meant to help the country to open up further to outside insurers while still maintaining control and strengthening risk management, said the CBIRC as cited by Asia Insurance Review. Feedback on the draft must be submitted to appropriate parties by February 15.