Insurance, China updates

Have foreign-invested insurer licences been made available to foreign investors?
AnJie Law Firm
  • China
  • 16 July 2019

For foreign investors with an eye on the Chinese insurance market, obtaining an insurance intermediary licence is a good idea. However, compared with insurance brokerage licences, insurance agency licences are difficult for foreign investors to obtain. Therefore, foreign investors that wish to acquire control over a Chinese insurer should consider either setting up a new foreign-invested insurer or acquiring an existing foreign-invested insurer.

Essential provisions in Chinese reinsurance contracts
AnJie Law Firm
  • China
  • 09 July 2019

During the past five years, the Chinese courts and arbitration institutions have handled major disputes relating to reinsurance contracts. These cases prompted legislation in the reinsurance sector and drew attention to the need for more careful wording in reinsurance contracts. This article provides an overview of several essential provisions in reinsurance contracts under Chinese law.

Who is China's new insurance regulator?
AnJie Law Firm
  • China
  • 18 June 2019

The China Banking and Insurance Regulatory Commission was recently formally unveiled in Beijing, marking the official launch of the new regulatory authority. This merger of the former China Banking Regulatory Commission and China Insurance Regulatory Commission is the biggest reform of China's financial regulatory system in more than 15 years and marks the start of the 'one committee, one bank, two commissions' regulation framework.

Insurance brokerage market further opened up to foreign investors
AnJie Law Firm
  • China
  • 11 June 2019

The China Banking and Insurance Regulatory Commission plans to abolish two of the requirements that foreign insurance brokerage companies must meet in order to conduct business in China (ie, 30 years of business operation history and $200 million worth of total assets). If this reform takes place, domestic and foreign investors are expected to have equal status when entering the Chinese insurance brokerage market.

Shift towards digital insurance and its regulation
AnJie Law Firm
  • China
  • 02 October 2018

Ping An Insurance (Group), a relative newcomer to the insurance industry, now ranks among the world's largest and most valuable insurers. Notably, its use of technology to embrace new business models that supplement its core insurance offerings is indicative of a wider global trend of providing customers with digital, added-value services. However, in China, this evolution towards added-value ecosystem-related services and the potential advantages on offer is marked by a different set of market considerations.

Rise of private health insurance: challenges and opportunities
AnJie Law Firm
  • China
  • 17 July 2018

Despite a range of stakeholders having vested interests in developing the private health insurance market, it has remained underdeveloped and is generally considered by Chinese insurers to be unprofitable compared with life insurance lines. Insurers have also found it hard to stimulate uptake by a consumer base that is relatively unfamiliar with the added value of such products. As such, the Chinese health insurance market is not as mature, innovative or profitable as it could be.

How can foreign-invested insurers apply new CIRC regulation by reference?
AnJie Law Firm
  • China
  • 17 April 2018

The China Insurance Regulatory Committee recently promulgated the new Measures for the Administration of Equity in Insurance Companies, which state that if the shareholding proportion of an insurer's foreign shareholders accounts for more than 25% of its registered capital, the relevant provisions of the measures must be applied by reference. This express inclusion of foreign-invested insurers represents a substantial shift away from current practice.

CIRC's assertive action underlines renewed emphasis on controlling financial risks
AnJie Law Firm
  • China
  • 20 March 2018

Since the end of 2017, the China Insurance Regulatory Committee has taken numerous regulatory measures to address disorder in the insurance market, some of which have brought certain domestic life insurers to task. The measures are notable, as they underline a renewed emphasis on controlling financial risks, which is of utmost concern for the government.

Increased insurance investment limits further liberalise insurance industry
AnJie Law Firm
  • China
  • 16 January 2018

Following the resumption of bilateral trade treaty talks between China and the United States, a 100-day plan was mooted which promised to improve trade ties going forward. One area of focus in this regard has been the foreign ownership limits that apply to inbound investment in Chinese financial services groups, including those pertaining to the country's insurance industry. This policy shift has given rise to expectations that further foreign investment in the insurance industry will increase significantly.

China 2020: world's largest insurance market and foreign insurers' strategies
AnJie Law Firm
  • China
  • 14 November 2017

China's shift towards a knowledge-based digital economy is fuelling growth in the insurance sector, which aligns with the government's plan to double the rate of insurance penetration by 2020. By this date, insurance premium income is expected to have reached Rmb4.5 trillion. If this aim is achieved, China will have usurped the United States to become the world's largest insurance market, which bodes well for overseas insurers looking to participate in the domestic market.

The rise of insurtech in China
AnJie Law Firm
  • China
  • 31 October 2017

A new wave of 'insurtech' companies (ie, insurers engaging with online distribution models and tech companies foraying into insurance) are recognising the gains to be made by entering into this emerging market. However, these developments by no means spell the end of the larger, more traditional Chinese insurers, which are adapting their longer-term business development strategies in response.

Cyber-insurance: a closer look
AnJie Law Firm
  • China
  • 29 August 2017

Recent ransomware attacks across the globe have once again brought to the fore the all-encompassing enterprise risk management challenge that cyber-risks present to corporations. The raft of operational consequences of such an attack present an ever-burgeoning opportunity for insurers to expand further into this potentially lucrative new line of business. This is particularly pertinent in China, where there has been a shift towards increasing digitisation and automation in various high-tech industries.

Upcoming regulations for investors in insurers
AnJie Law Firm
  • China
  • 06 June 2017

The regulations concerning investment limits and the required qualifications for shareholders that want to invest in Chinese insurers continue to be a focal point for potential investors. The China Insurance Regulatory Commission recently published the Administrative Measures for Equities of Insurance Companies (Draft for Comments), which make fundamental changes to the existing regulatory framework.

Comparative insight into China Risk-Oriented Solvency System
AnJie Law Firm
  • China
  • 30 May 2017

At present, the recently adopted China Risk-Oriented Solvency System (C-ROSS) is the only regime which regulates mainland insurers' capital adequacy. By appropriating the most useful features of existing global regimes, C-ROSS has formulated a risk-based supervision regime that is on a par with global standards, yet remains tailored to the specifics of the Chinese insurance market.

Declarations of death in personal insurance contract cases
AnJie Law Firm
  • China
  • 16 May 2017

When declarations of death are sought for insured persons, two issues arise: whether the declaration relates to accidental death; and whether it falls within the insurance period. The popular viewpoint is that a declaration of death is regarded as resulting from an accident, in which case the insurer must provide compensation. While the declaration may be dated after the period of cover under the insurance contract, this does not absolve the insurer of responsibility to compensate the claimant.

Presidential summit postulates rise of insurance investment ceiling
AnJie Law Firm
  • China
  • 09 May 2017

At the first meeting between Chinese President Xi Jinping and US President Donald Trump, the two leaders set the tone for future cooperation on a wide range of issues, not least market access between the two countries. According to Chinese and US officials, better access for US financial sector investments into China was mooted for inclusion as part of a 100-day plan to improve trade ties. This could have notable implications for the Chinese insurance industry.

CIRC imposes significant penalties on insurers due to irregularities
AnJie Law Firm
  • China
  • 14 March 2017

The China Insurance Regulatory Commission (CIRC) recently penalised two insurers for illegal practices with regard to the use of insurance funds. The penalties came just a few days after the CIRC chair stated that the regulator will continue to put significant pressure on companies and maintain close control over disorderly expansion and radical investment in order to eliminate potential risks. Companies that refuse to rectify their actions will be subject to the CIRC's strictest penalties.

Does the accessory principle apply to surety bonds?
AnJie Law Firm
  • China
  • 22 November 2016

China's surety bond market underwent significant development in 2016 and surety bonds have become one of the most important methods for securing a financial guarantee. However, due to a lack of clear Supreme Court guidance on the matter, the laws that apply to surety bonds issued by insurers in China are still the subject of much debate. One key issue is whether the Guarantee Law's accessory principle applies to surety bonds issued by insurers in China.

Duty to report: obligations of insured under Insurance Law
AnJie Law Firm
  • China
  • 16 August 2016

Article 21 of the Insurance Law sets out the duty of an insured party to notify its insurer of an accident in a timely manner. However, the vagueness of the article has led to issues regarding its interpretation, including the definition of 'timely manner' and whether insurers are still liable in the event that an insured party fails to issue a timely notification.

New CIRC measures strengthen supervision of illegal foreign insurance policy sales
AnJie Law Firm
  • China
  • 14 June 2016

Foreign insurance policies have attracted many mainland China residents, but they are not without risks. The China Insurance Regulatory Commission – which prohibits insurers from conducting illegal insurance activities and organisations or individuals from conducting illegal intermediary insurance activities without its approval – recently issued significant supervisory measures in relation to the potential risks and effects of such policies.

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