Legislation roundup: Preference shares, insurance risk classification and healthcare reform

Insurance

China Insurance Regulatory Commission, Circular on Matters Relevant to the Investment of Insurance Capital in Preference Shares
中国保险监督管理委员会关于保险资金投资优先股有关事项的通知

Insurance capital is allowed to invest in publicly offered preference shares and privately offered preference shares. Preference shares in which insurance capital is invested shall have a long-term credit rating of at least A or its equivalent. Preference shares in which insurance capital is invested shall be recognised as equity assets or fixed-return assets respectively depending on the issuer's classification, and shall be included in either the equity or fixed-return asset investment percentage for administration purposes.

See the digest for more details.

Further reading
Measures for the Administration of the Pilot Project for Preference Shares
Guiding Opinions on the Launch of the Pilot Project for Preference Shares
Tentative Measures for the Administration of the Application of Insurance Capital (Revised)

China Insurance Regulatory Commission, Guidelines for the Risk Classification of Insurance Assets into Five Grades
中国保险监督管理委员会保险资产风险五级分类指引

When evaluating the quality of the assets of an insurance institution, they shall be divided into five categories based on risk, namely pass, special mention, substandard, doubtful and loss, with the last three categories collectively referred to as “non-performing assets”. Assets that require risk classification shall include assets invested in by an insurance institution other than those subject to fair value measurement and changes to these assets are counted as gains/losses for the period in question or owners' equity.

Further reading
Risk Control Guidelines for Use of Insurance Funds (Trial Implementation)
Guidelines for the Disclosure of Information on the Application of Capital by Insurance Companies No.1: Affiliated Transactions


Health care

Beijing Municipality, Several Opinions on Continuing to Intensify Reform of the Medical, Pharmaceutical and Health System
北京市关于继续深化医药卫生体制改革的若干意见

In terms of the development of newly added medical resources, preferential consideration will be given to privately established hospitals. Private efforts to establish non-profit medical institutions are encouraged, and the direction of private efforts toward areas with shortages of medical resources and fields that satisfy demand for diversified and multi-tiered medical services is encouraged. Participation of the private sector in changing the organisational form and restructuring of public hospitals and cooperative establishment of hospitals will be actively explored.

See the digest for more details.

Further reading
Circular on Launching a Pilot Project for the Establishment of Wholly Foreign-owned Hospitals
A warning for foreign hospitals