China Insurance Regulatory Commission, Measures for the Administration of Controlling Shareholders of Insurance Companies

Promulgated: July 25 2012
Effective: October 1 2012
Interpreting authority: China Insurance Regulatory Commission

Applicability: The term “insurance company” means a commercial insurance company whose establishment has been approved by the China Insurance Regulatory Commission (CIRC) and that has been registered in accordance with the law (Article 2).

The term “controlling shareholder of an insurance company” means a shareholder whose capital contribution to an insurance company accounts for at least 50% of the company's total capital or whose shareholding accounts for at least 50% of the total share capital of the insurance company; or a shareholder whose capital contribution or shareholding, although not accounting for 50%, is nonetheless, through the voting rights attaching to its capital contribution or its shareholding, able to materially affect the resolutions of the shareholders' meeting or shareholders' general meeting (Article 3).

The Measures shall, mutatis mutandis, apply to controlling shareholders of insurance group companies (Article 37).

Main contents: The working personnel of the controlling shareholders of an insurance company (except for the chairman of the board of directors) may not concurrently serve as the company's executive director or senior management personnel (Article 7). This restriction does not apply to the controlling shareholders of foreign-funded insurance companies. Where such matter is otherwise provided by the CIRC, such provisions shall prevail (Article 39).

The controlling shareholders of an insurance company may not sell their privately offered bonds to the insurance company. They shall also take necessary measures to ensure that the insurance company will not purchase more than 10% of an issuance of their publicly offered bonds (Article 15). The controlling shareholders of an insurance company may not accept equity investment from the insurance company under their control or from the subsidiary controlled by the said insurance company (Article 21).

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