The Financial Market Authority (FMA) recently published a new circular concerning key information documents for packaged retail and insurance-based investment products. The FMA had already published a revised version of its circular on sound remuneration policies and practices on January 19 2018.
The Sixth Civil Chamber of the Rio de Janeiro State Court of Appeals recently decided that a protection and indemnity (P&I) club was not liable for an associate shipowner's debts. In its decision, the court distinguished the P&I club from insurers operating in the Brazilian insurance market. This decision is paramount because it creates an important court precedent regarding P&I clubs' liability for the damages caused to third parties by their associates.
The Department of Finance Canada recently announced the launch of the first of a two-stage consultation process on the federal financial sector legislative and regulatory framework. In this first stage of the process, the department is seeking input on the trends that are highlighted in the paper, the implications of these trends and the areas where action is possible and desirable.
The securities and insurance regulator (SVS) recently published for comment the fifth version of its methodology for determining the risk-based capital of insurers. The latest version ‒ as well as the conceptual bases developed by the SVS for analysis, discussion and improvement ‒ includes a number of changes from the previous version and will be subject to public consultation until July 31 2017.
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.
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.
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.
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'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.