China Insurance Regulatory Commission, Contingency Measures for Major Unexpected Events of the Insurance Industry Provisions

Issued: December 18 2003
Effective: February 1 2004
Applicability: "Major unexpected events" refers to natural disasters, major accidents and events that are related to the insurance industry that happen suddenly and may seriously affect or jeopardize the normal operation of the insurance industry, the solvency of insurance companies and social stability. Other major events for which the China Insurance Regulatory Commission (CIRC) deems contingency measures shall be taken are also defined as major unexpected events (Article 2).

Main contents: The Provisions specify the major unexpected events that should be promptly reported to the CIRC, including natural disasters or accidents causing over Rmb50 million or more of insured property loss or Rmb30 million of compensation to personal injuries or deaths, public health incidents such as mass contraction of diseases or food poisoning, payment difficulties or sudden deterioration in solvency that may lead to bankruptcy of insurance companies, and a situation where the parent company of a foreign-invested insurance company is under a serious crisis that seriously affects its business development in China (Article 10). After the occurrence of these events, an information release system shall take place, in which a news spokesperson shall be specified to announce the news to the public; other related personnel may not announce the news without authorization (Article 19). Insurance companies and their branches shall have contingency mechanisms and plans as an important part of their internal control systems (Article 24).