China Insurance Regulatory Commission, Tentative Measures for Equity Investment with Insurance Capital
中国保监会保险资金投资股权暂行办法
October 13, 2010 | BY
clpstaff &clp articles &Equity investments with insurance capital limited to certain businesses.
Issued: September 3 2010
Effective: September 3 2010
Main contents: The Measures detail the qualification conditions, subject matter of investments, investment code, risk control and oversight in connection with equity investment with insurance capital.
An insurance company wishing to make a direct investment in equity shall satisfy the conditions such as:
(1) having a solvency adequacy ratio of not less than 150% as at the end of the last financial year and, at the time of the investment, having a solvency adequacy ratio of not less than 150% as at the end of the last quarter; and
(2) being profitable and having net assets of not less than Rmb1 billion during the last financial year (Article 9)
Insurance capital may not be invested in the equity of enterprises that do not comply with state industrial policy, in venture or risk investment funds, or in the establishment of, or the taking of an equity interest in, equity investment management institutions.
The direct investment in equity of insurance capital shall be limited solely to the equity of insurance enterprises, non-insurance financial enterprises and insurance business-linked old-age pension, medical, automobile service and other such enterprises (Article 12).
If an insurance company is to invest in enterprise equity, it shall comply with the percentage restrictions such as:
(1) the total of the book balance of its investments in the equity of unlisted enterprises and in financial products linked to the equity of unlisted enterprises may not be greater than 5% of its total assets as at the end of the previous quarter; and
(2) the book balance of direct investments in equity may not exceed its net assets (Article 15).
Related legislation: PRC Insurance Law (Amended), Feb 28 2009, CLP 2009 No.3 p.35; PRC Trust Law, Apr 28 2001, CLP 2001 No.5 p.22; PRC Company Law (Amended), Oct 27 2005, CLP 2005 No.10 p.21; PRC Partnership Law, Aug 27 2006; and Tentative Measures for the Administration of the Application of Insurance Capital, Feb 1 2010
clp reference:3900/10.09.03prc reference:保监发〔2010〕79号promulgated:2010-09-03effective:2010-09-03This premium content is reserved for
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