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	CIRCULAR OF CHINA INSURANCE REGULATORY COMMISSION CONCERNING STATUTORY REINSURANCE

	(No.109 [2002] of China Insurance Regulatory Commission promulgated on October 28, 2002)


SUBJECT : STATUTORY REINSURANCE
ISSUING DEPARTMENT : CHINA INSURANCE REGULATORY COMMISSION
ISSUE DATE : 10/28/2002
IMPLEMENT DATE : 01/01/2003
LENGTH : 293 words
TEXT :

In accordance with the relevant commitments on statutory reinsurance made by the government of China for its accession to the World Trade Organization, the following notice is hereby issued concerning the time and proportion of the adjustment of statutory reinsurance and the relevant requirements:

I. The time of adjustment of the proportion of statutory reinsurance is January 1, 2003. The proportion of statutory reinsurance shall be lowered from 20% to 15% for the period between January 1, 2003, and December 31, 2003; the proportion of statutory reinsurance shall be lowered from 15% to 10% for the period between January 1, 2004, and December 31, 2004; the proportion of statutory reinsurance shall be lowered from 10% to 5% for the period between January 1, 2005, and December 31, 2005; and the statutory reinsurance shall be completely cancelled as of January 1, 2006.

II. The business of statutory reinsurance shall be calculated on a fiscal year basis. With respect to the insurance business starting in any of the periods mentioned above, the proportion of statutory reinsurance of the corresponding premium and the proportion of the recovered compensation shall comply with the prescribed proportion of statutory reinsurance of that period.

III. The ceding company and the assuming company shall negotiate on the conditions for statutory reinsurance in accordance with the business operation mechanism.

IV. Where the ceding company and the assuming company deem necessary, China Reinsurance Company may, as the leader and with participation of the direct insurance companies, modify the Conditions for Statutory Reinsurance and the Implementation Rules thereof, and the modified result shall be submitted to CIRC before the end of November.

V. A ceding company shall submit the statutory reinsurance business statements to the assuming company pursuant to he conditions for statutory reinsurance.