State Administration of Foreign Exchange and China Insurance Regulatory Commission, Issues Relevant to Administration of the Sale and Payment of Foreign Exchange for Foreign-ceded Reinsurance Business Circular

Issued: June 20 2003
Effective: July 1 2003

Main contents: Item One of the Circular allows wholly Chinese-owned insurance companies, Sino-foreign equity joint venture insurance companies and branches of foreign insurance companies in China (hereafter collectively, domestic insurance companies) that are permitted to engage in foreign exchange reinsurance businesses may engage in foreign-ceded reinsurance businesses for domestic insurance and purchase and pay foreign exchange for foreign-ceded renminbi reinsurance businesses reaching a certain amount or certain standards. Domestic insurance companies can only pay for their foreign-ceded foreign exchange reinsurance out of their foreign exchange operation account and cannot purchase foreign exchange to pay for it. Sub-branches of domestic insurance companies, however, are not allowed to purchase and pay foreign exchange for such a purpose.
Related legislation: Foreign Exchange Control in Insurance Business Tentative Provisions, Sep 24 2002, CLP 2003 No.1 p10