China Insurance Regulatory Commission, Measures for the Administration of the Equity of Insurance Companies
中国保险监督管理委员会保险公司股权管理办法
July 14, 2010 | BY
clpstaff &clp articles &Shareholding restriction on single shareholders of insurance companies relaxed.
Promulgated: May 4 2010
Effective: June 10 2010
Interpreting authority: China Insurance Regulatory Commission
Applicability: For the purposes of these Measures, the term “insurance company” means an insurance company that has been established with the approval of the China Insurance Regulatory Commission (the CIRC), has been registered in accordance with the law and the capital contributions to which or shareholdings of which by foreign shareholders account for less than 25% of its registered capital (Article 2).
Main contents: According to the Measures, the capital contribution or shareholding percentage of any single shareholder (including its affiliated parties) of an insurance company may not exceed 20% of the insurance company's registered capital. The CIRC may release a major shareholder from the foregoing restriction on shareholding percentage if it satisfies the provisions of Article 15 (Article 4).
A major shareholder that holds at least 15% of the equity of an insurance company or that, although holding less than 15%, nonetheless directly or indirectly controls the insurance company shall additionally satisfy the following conditions:
(1) having the capacity to make ongoing capital contributions and having been consistently profitable during the most recent three financial years;
(2) having relatively substantial funding strengths, and net assets of not less than Rmb200 million; and
(3) having a good reputation and enjoying a leading position in its industry (Article 15).
An overseas financial institution wishing to invest in the equity of an insurance company shall have total assets of not less than US$2 billion as at the end of the most recent year and a long-term credit rating of A or above during the most recent three years as rated by an international rating agency (Article 14).
Related legislation: PRC Company Law (Amended), Oct 27 2005, CLP 2005 No.10 p.21; and PRC Insurance Law (Amended), Feb 28 2009, CLP 2009 No.3 p.35
Repealed legislation: Tentative Provisions for Investing in the Equity of Insurance Companies, April 1 2000; and Circular on Matters Relevant to Regulating the Acceptance of Foreign Equity Investment by Chinese-invested Insurance Companies, Jun 19 2001
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