Circular on Issues Relevant to Reinsurance Business Safety
关于再保险业务安全性有关问题的通知
The Circular provides guidelines to reinsurance contracts and retrocession contracts whose term commences on or after January 1 2008 as to risk management mechanism, financial strength ratings, paid-in monetary capital, solvency and trading history requirements for the selection of a reinsurance cedent.
(Issued by the China Insurance Regulatory Commission on November 15 2007.)
Bao Jian Fa [2007] No.112
Insurance companies:
With the rapid development of the insurance market in China, the task of guarding against risks has become increasingly onerous. As the principal means of guarding against risks and spreading risks, the function of reinsurance has increasingly come to the fore. However, the reinsurance market itself poses certain risks, and, in particular, factors such as the solvency, financial position and profitability of a reinsurer have a material impact on the stable operations and healthy development of a cedent. With a view to thoroughly implementing the spirit of the 2007 National Insurance Conference, strengthening the establishment by the insurance industry of mechanisms for guarding against risks, improving the insurance industry's capacity to counter risks and promoting the rapid and healthy development of the insurance market, we hereby notify you concerning relevant issues as follows:
(中国保险业监督管理委员会于二零零七年十一月十五日发布。)
保监发 [2007] 112号
各保险公司：
随着我国保险市场的快速发展，风险防范任务日益艰巨。作为风险防范和风险分散的主渠道，再保险的功能作用日益突出。然而，再保险市场本身也存在一定风险，特别是再保险接受人的偿付能力、财务状况、盈利能力等因素，对分出公司的稳定经营和健康发展影响重大。为贯彻落实2007年全国保险工作会议精神，加强保险业风险防范机制建设，提高保险业抗风险能力，促进保险市场又快又好发展，现就有关问题通知如下：
1. A reinsurance cedent shall establish a sound risk management mechanism and strengthen its management of the risks involved in reinsurance business.
(1) A cedent shall improve its risk assessment system and risk control mechanism, review its reinsurance plan each year, establish objective reinsurance business assessment standards, examine its risk position, including its reinsurance risks, periodically assess its risks, and establish a mechanism for the identification, assessment and monitoring of risks.
一、再保险分出公司应建立完善的风险管理机制，强化对再保险业务的风险管理。
(2) A cedent shall formulate clear policies and procedures based on its reinsurance strategy, prudently select reinsurers, formulate reinsurance plans in an objective manner, asses the safety of its reinsurance business and periodically review each of its reinsurance contracts.
(3) A cedent's chief actuary shall earnestly perform his duties of formulating or participating in the formulation of reinsurance rules and regulations and reviewing or participating in the review of reinsurance arrangements and plans. If a cedent has not yet established a chief actuary system, its person in charge of actuarial affairs shall provisionally perform the aforementioned duties.
（一）分出公司应健全风险评估体系和风险控制机制，每年审核公司的再保险计划，建立科学的再保险业务评价标准，对包括再保险风险在内的风险状况进行检查并定期进行风险评估，建立识别、评估和监控风险的机制。
(4) If a cedent is not an independent legal person institution, it shall, with the authorization of its head office, operate compliantly in strict accordance with the law, improve its internal control implementation capabilities and ensure compliant management of its reinsurance business.
2. When selecting a reinsurer, a reinsurance cedent shall observe the following requirements:
（二）分出公司应按照公司的再保险战略制定清晰的政策和程序，审慎选择再保险接受人，科学制订再保险方案，评估再保险业务的安全性，并定期审核每一份合约再保险合同。
(1) when entering into a reinsurance contract, with the exception of nuclear insurance and aerospace insurance, the lead reinsurer of the contracted reinsurance or the reinsurer of the largest share of contracted reinsurance shall be a wholly state-owned or a state-controlled insurance company, or an insurance firm whose most recent financial strength rating, at minimum, satisfies one of the following criteria:
(i) a Standard & Poor's rating of not less than A-;
（三）分出公司的总精算师应切实履行其制定或参与制定再保险制度、审核或参与审核再保险安排计划的职责。尚未建立总精算师制度的分出公司，由其精算责任人暂时代行上述职责。
(ii) an A.M. Best rating of not less than A-;
(iii) a Moody's rating of not less than A3; or
（四）分出公司不是独立法人机构的，应在总公司的授权下，严格依法合规经营，提高内控执行力，规范分公司再保险业务管理操作。
(iv) a Fitch rating of not less than A-;
when entering into a reinsurance contract, with the exception of nuclear insurance and aerospace insurance, the other reinsurers of the contracted reinsurance shall be wholly state-owned or state-controlled insurance companies, or insurance firms whose most recent financial strength rating, at minimum, satisfies one of the following criteria:
二、再保险分出公司选择再保险接受人，应遵循以下要求：
(i) a Standard & Poor's rating of not less than BBB;
(ii) an A.M. Best rating of not less than B++;
（一）在订立签署再保险合同时，除核保险、航天保险外，合约再保险业务的首席接受人或合约再保险业务的最大份额接受人应为国有独资、国有控股保险公司、或者最新财务实力评级至少应符合下列标准之一的保险机构：
(iii) a Moody's rating of not less than Baa; or
(iv) a Fitch rating of not less than BBB;
1、标准普尔（Standard&Poor's）评级应不低于A-；
(2) except in the case of nuclear insurance or aerospace insurance, the paid-in monetary capital of a reinsurer may not be less than Rmb200 million or the equivalent in another currency and, if the lead reinsurer of the contracted reinsurance or the reinsurer of the largest share of the contracted reinsurance is a firm not specializing in reinsurance, its paid-in monetary capital may not be less than Rmb1 billion or the equivalent in another currency;
(3) the solvency of a reinsurer shall comply with relevant provisions on solvency of the regulator of the place where the company is registered and the cedent shall timely keep abreast of the reinsurer's solvency status;
2、A.M.BEST评级应不低于A-；
(4) a reinsurer may not have committed any major violation of laws or regulations in the two financial years preceding the commencement date of the reinsurance contract.
3. If, during the term of a reinsurance contract, the financial strength rating of a reinsurer falls below the requirements hereof for three years in succession, the cedent shall consider taking appropriate measures to reduce its risks.
3、穆迪（Moodys）评级应不低于A3；
4. For the purposes of Article 2 hereof, the term "reinsurer" refers to an independent legal person institution. If a reinsurer is a (sub-)branch, its head office shall satisfy the foregoing relevant requirements of this Circular.
5. This Circular shall apply to reinsurance contracts and retrocession contracts whose term commences on or after January 1 2008.
clp reference:3900/07.11.15prc reference:保监发 [2007] 112号promulgated:2007-11-154、惠誉（Fitch）评级应不低于A-。
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