(Adopted at the 49th Executive Meeting of the State Council on December 5, 2001, promulgated by Decree No. 336 of the State Council of the People's Republic of China on December 12, 2001, and effective as of February 1, 2002)
Chapter I General Provisions
Article 1These Regulations are formulated to meet the need of opening up to the outside world and developing economy, to strengthen and improve the supervision and administration of foreign-funded insurance companies, and to promote the healthy development of the insurance industry.
Article 2The term of "foreign-funded insurance companies", as used in these Regulations, refers to the following insurance companies that are approved to be established and to operate within the territory of China in accordance with relevant laws and administrative regulations of the People's Republic of China:
(1) insurance companies which are funded and operated within the territory of China by foreign insurance companies jointly with Chinese companies or enterprises (hereinafter referred to as joint venture insurance companies);
(2) insurance companies which are solely funded and operated within the territory of China by foreign insurance companies(hereinafter referred to as solely-foreign-funded insurance companies); and
(3) branches of foreign insurance companies within the territory of China (hereinafter referred to as branches of foreign insurance companies).
Article 3Foreign-funded insurance companies shall abide by the laws and regulations of China and shall not infringe upon the social and public interests of China.
The legitimate business activities and lawful rights and interests of foreign-funded insurance companies are protected by the laws of China.
Article 4The China Insurance Regulatory Commission (hereinafter referred to as CIRC) is responsible for the supervision and administration of foreign-funded insurance companies. The agencies of CIRC exercise routine supervision and administration on foreign-funded insurance companies within their respective jurisdictions according to the powers delegated by CIRC.
Chapter II Establishment and Registration
Article 5The establishment of a foreign-funded insurance company shall be approved by CIRC.
Regions where foreign-funded insurance companies may be established shall be determined by CIRC in accordance with relevant provisions.
Article 6For foreign-funded insurance companies to engage in insurance of the person or property insurance business, their establishment form and foreign investment proportion shall be determined by CIRC in accordance with relevant provisions.
Article 7The minimum registered capital requirement of a joint venture insurance company or a solely-foreign-funded insurance company is RMB 200,000,000 yuan or its equivalent of a freely convertible currency; the minimum registered capital must be fully paid-up in currency. The contribution of foreign insurance companies shall be made in freely convertible currencies.
A branch of a foreign insurance company shall be allocated as its operating fund by its headquarter company a free sum of freely convertible currencies equivalent to not less than RMB 200,000,000 yuan.
CIRC may, according to the business scope and operation scale of a foreign-funded insurance company, increase the minimum requirement of the registered capital or operating fund provided for in the preceding two paragraphs.
Article 8A foreign insurance company applying to establish a foreign-funded insurance company shall meet the following requirements:
(1) It has engaged in insurance business for not less than 30 years;
(2) It has maintained a representative office within the territory of China for not less than 2 years;
(3) It possessed total assets of not less than US$5,000,000,000 at the end of the year prior to the submission of its establishment application;
(4) The country or region where it is domiciled has a sound system of insurance supervision and administration, and it is under the effective supervision and administration by the relevant competent authorities of the country or region;
(5) It satisfies the solvency standards of the country or region where it is domiciled;
(6) The relevant competent authorities of the country or region where it is domiciled consents to its application; and
(7) It meets other prudent requirements prescribed by CIRC.
Article 9To establish a foreign-funded insurance company, the applicant shall submit an application to CRIC in writing, together with the following materials:
(1) an application signed by the legal representative of the applicant, or, where a joint venture insurance company is applied for, jointly signed by the respective legal representatives of each joint party;
(2) a duplicate of the foreign applicant's business license, a certification proving that the foreign applicant satisfies the solvency standards, and the opinion on the application issued by the relevant competent authorities of the country or region where the applicant is domiciled;
(3) the foreign applicant's articles of association and its annual reports for the last three years prior to submission of the application;
(4) in the case of applying for establishing a joint venture insurance company, relevant materials of the Chinese applicant(s);
(5) the feasibility study report and the preparatory plan of the proposed company;
(6) the names, biographical information and qualification certifications of the personnel responsible for the preparatory work of the proposed company; and
(7) other materials to be submitted as provided by CIRC.
Article 10CIRC shall conduct a preliminary examination on the application for establishing a foreign-funded insurance company and decide to accept or reject it within 6 months from the date of receipt of the complete application documents. If the application is accepted, CIRC shall issue an official application form to the applicant; if the application is rejected, CIRC shall inform the applicant in writing and give reasons for the rejection.
Article 11Applicants shall complete the preparatory work within 1 year from the date of receipt of the official application form. An extension of 3 months may be granted upon the approval of CIRC where the preparatory work is not completed within the specified time limit for proper reasons. If the preparatory work is not completed within the extended period, the acceptance decision made by CIRC automatically ceases to be effective. Upon completion of the preparatory work, the applicant shall submit to CIRC the completed application form together with the following materials for examination and approval:
(1) a report on the preparatory work;
(2) the articles of association of the proposed company;
(3) a list of the investors of the proposed company and the amount of their respective contributions;
(4) a capital verification certificate issued by a statutory capital verification institution;
(5) letters of attorney issued to the principal responsible persons of the proposed company;
(6) the names, biographical information and qualification certifications of the senior management personnel of the proposed company;
(7) the business plan and reinsurance program of the proposed company for the first 3 years to come;
(8) insurance clauses, premium rates and the calculation statements of the liability reserves for the insurance products to be distributed within the territory of China;
(9) information on the business premises and other facilities related to the business operation of the proposed company;
(10) in the case of applying for establishing a branch of a foreign insurance company, a bond issued by the headquarter company guaranteeing the taxes and debts obligation of the proposed branch;
(11) in the case of applying for establishing a joint venture insurance company, the joint venture agreement; and
(12) other materials to be submitted as provided by CIRC.
Article 12CIRC shall, within 60 days from the date of receipt of the complete official application documents, decide to approve or disapprove the application. If the application is approved, CIRC shall issue a permit to carry on insurance business; if the application is disapproved, CIRC shall inform the applicant in writing and give the reasons for the disapproval.
Where the establishment of a foreign-funded insurance company is approved, the applicant shall, on strength of the permit to carry on insurance business, register with the administrative department for industry and commerce and obtain a business license.
Article 13Upon the establishment of a foreign-funded insurance company, 20% of the total amount of its registered capital or operating fund shall be deposited with the bank(s) designated by CIRC as a guarantee fund. This guarantee fund shall not be used except for paying off debts when the foreign-funded insurance company is liquidated.
Article 14Branching of a foreign-funded insurance company within the territory of China shall be examined and approved by CIRC in accordance with relevant provisions.
