PRC Insurance Law (Revised)

Revised on April 24 2015. Latest revision can be found at:
http://www.chinalawandpractice.com/Article/3455598/PRC-Insurance-Law-Revised-in-2015.html

Promulgated: October 28 2002
Effective: January 1 2003
Applicability: The revised Law applies to Sino-foreign equity joint insurance companies, wholly foreign-owned insurance companies and PRC branches of foreign insurance companies (Article 154).

Main contents: The revised Law prohibits insurance companies to invest their funds in the establishment of non-insurance enterprises (Article 105). A property insurer is now permitted to provide short-term health insurance and accident insurance services subject to verification by the relevant insurance regulatory authority (Article 92). Insurance terms and premium rates are subject to approval by the relevant insurance regulatory authority only if they are related to such types of insurance that are of general public interest, mandatory under the law or newly developed life insurance. Those related to other types of insurance are only required to be filed with the insurance regulatory authority (Article 107). In respect of insurance agents, the revised Law requires the insurer to exercise tighter administrative power over its agents. It is provided that the insurer shall enter into agency agreements with its agent, that it shall pay commissions to legally qualified agents only and that it shall provide training to agents to improve their professional ethics and business quality (Articles 127, 134 and 136). Where an insurance agent acts beyond its authority in acting for an insurer but leaves the insurance applicant with reasonable belief that the agent has such authority, and where an insurance contract has been signed, the insurer cannot be discharged of its insurance liability (Article 128). The revised Law forbids an individual life insurance agent to act for two or more insurers concurrently (Article 129). As for the regulatory authorities, the revised Law requires that it shall establish a regulatory framework to ensure that insurers maintain their minimum payment capacity (Article 108). The regulatory authority has the right to look into the funds of insurers deposited with financial institutions (Article 109). All insurers (and not just life insurers) shall employ professional actuaries certified by the insurance regulatory authorities and establish actuarial report systems (Article 121).