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TABLE OF CONTENTS CHAPTER I GENERAL PRINCIPLES CHAPTER II APPLICATION FOR ESTABLISHMENT CHAPTER III REGULATION AND ADMINISTRATION CHAPTER IV RESPONSIBILITIES AND PUNISHMENTS CHAPTER V SUPPLENTARY PROVISIONS CHAPTER I GENERAL PRINCIPLES Article 1. To meet demands for the opening-up of the Chinese insurance market, and to enhance the regulation of representative offices of foreign insurance institutions in the People's Republic of China, this regulation has been formulated in accordance with the Insurance Law of the People's Republic of China (hereinafter referred to as the Insurance Law). Article 2. The China Insurance Supervisory and Regulatory Commission (hereinafter referred to as CISRC) is responsible for the regulation and administration of Representative Offices in accordance with the present regulation and the Insurance Law as well as other relevant laws and regulations of the People's Republic of China ( hereinafter referred to as China). Article 3. "Foreign insurance institutions" in this regulation means insurance companies, re-insurance companies, insurance intermediary institutions, insurance associations and other insurance organisations registered outside China. "Representative Offices" in this regulation refers to the expatriate offices of foreign insurance institutions established upon approval in China for non-profit activities such as liaison, market survey, etc. Article 4. The Representative Offices shall abide by Chinese laws and regulations, and their lawful rights and interests shall be protected by Chinese law. CHAPTER II APPLICATION FOR ESTABLISHMENT Article 5. Any foreign insurance institution that intends to establish a Representative Office in China first should be established with the approval of the competent authority of the home country or region. Article 6. The following documents shall be submitted to CISRC by the applicant: (1) An application letter to the President of CISRC signed by the chairman of the board of directors or the general manager or the person- in-charge of the foreign insurance institution; (2) The business license (duplicate) or the legal creation certificate (duplicate) or the registration certificate (duplicate) issued by the competent authority of the country or region where it is located; (3) Articles of association, the list of directors or principal partners or managerial staff of the foreign insurance institution; (4) Annual financial statements for the three years prior to application; (5) Other documents as may be required by CISRC. The business license, or certificate of lawful establishment of business, or the registration certificate should be notarized by a public notary approved by the country or region where the institution is situated. Article 7. After the application is examined and accepted by CISRC, the applicant will receive a formal application form, which shall be submitted to CISRC within two months after the date of receipt, together with the following documents: (1) The ID card, education certificate and CV of the Chief Representative to be appointed for the Representative Office; and (2) The Power of Attorney of the Chief Representative signed by the chairman of the board of directors or the general manager or the person- in-charge of the foreign insurance institution. Should the formal application form not be submitted within the time limit, the application shall be deemed as having been withdrawn. Article 8. Should the applicant not receive the formal application form within six months after the application documents are submitted, the application shall be deemed as having not been accepted. Article 9. Those foreign insurance institutions that have already established two or more Representative Offices, may apply for the establishment of a general Representative Office. The "general Representative Office" in this regulation refers to an expatriate office of a foreign insurance institution established in China upon approval for the administration of its other Representative Offices and for daily liaison work with CISRC. The General Representative Office shall be established on the basis of an existing Representative Office. Article 10. For a foreign insurance institution that intends to establish a general Representative Office, where the legal status remains the same, it shall submit an application letter to the President of CISRC signed by the chairman of the board of directors or the general manager or the person-in-charge of the foreign insurance institution. Where the legal status is changed as a result of re-organisation, division or merger, it shall submit to CISRC those documents specified in Article 6. Approval for establishment of and measures on the regulations for the general representative office are the same as those for the representative office. Article 11. CISRC shall grant approval certificates to the Representative Offices approved with a validity period of six years. The approved Representative Office shall go through registration procedure by presenting the approval certificate to the competent administration for industry and commerce within thirty days after approval. It shall also go through procedures for lawful residence and individual income tax registration at the competent public security department and taxation office. CHAPTER III REGULATION AND ADMINISTRATION Article 12. For those foreign insurance institutions that have already established two or more Representative Offices but not a general Representative Office, one of its Representative Offices shall be appointed responsible for the daily liaison work with CISRC. Article 13. The name of the Representative Office shall be of the following format and sequence: "the Representative Office" of "the name of the foreign insurance institution" in "the name of the city where it is situated". The name of the General Representative Office shall be of the following format and sequence: "the General Representative Office in China" of "the name of the foreign insurance institution". Article 14. The person-in-charge of a Representative Office is called "chief representative", "representative" or "deputy representative". The person-in-charge of a general Representative Office is called " General Representative", "representative" or "deputy representative". Unless otherwise approved, a general Representative Office shall not, in principle, appoint its chief representative. Unless specified otherwise, the regulation and administration of the general representative shall be the same as that of the chief representative. Article 15. The staff of a Representative Office should behave properly, respect the laws and regulations of China and have no record of unlawful activities. Article 16. The general representative and the chief representative should have university education. The general representative should have at least eight years of work experience in the insurance industry, while the chief representative should have at least five years of work experience in the insurance industry. Should they not have any university education, they should have at least ten years of work experience in the insurance industry. Article 17. The number of foreign staff in a single Representative Office shall not exceed three. Article 18. The Representative Office and its staff may not conclude with any legal or natural person any agreement or contract that may bring economic income to the Representative Office or the foreign insurance institution it represents, neither may it conduct any other profitable business activities. Article 19. A person may not serve as the chief representative of two or more Representative Offices at the same time. Article 20. The chief representative should reside in the place of the Representative Office in order to oversee daily operations. Article 21. The Representative Office shall submit an annual work report to CISRC by the end of every February in the form a floppy disk (Chinese version of Win 95 or win 98) and written in Chinese in the format specified by CISRC. Article 22. The Representative Office shall submit to CISRC an annual financial report of the foreign insurance institution it represents within two months after the fiscal year ends. Article 23. Should the following events happen to the foreign insurance institution it represents, the Representative Office shall inform CISRC for record within one working day after the event is announced by the foreign insurance institution: (1) Modification of its articles of association, registered capital or registered address; (2) Its Re-organization, division, merger or acquisition, or change of principal persons-in-charge; (3) Serious loss of its business activities. Article 24. Any of the following shall be subject to the approval of CISRC: (1) Change of chief representative. The Representative Office should submit to the President of CISRC an application letter signed by the chairman of the board of directors, general manager or the person-in- charge of the foreign insurance institution it represents, the power of attorney of the new chief representative and its ID card, education certificate and CV; (2) Change of name. The Representative Office should submit to the President of CISRC an application letter signed by the chairman of the board of directors, general manager or the person-in-charge of the foreign insurance institution it represents and copies of other relevant documents; (3) Extension of authorization. The Representative Office should submit to the President of CISRC an application letter signed by the chairman of the board of directors, general manager or the person-in-charge of the foreign insurance institution it represents two months before its approved period of authorization ends. Authorization can be extended for another six years upon approval; (4) Change of registered address. The Representative Office should submit to the Person-in-charge of the International Department of CISRC an application letter signed by the chief representative; or (5) Withdrawal of the Representative Office. The Representative Office should submit to the President of CISRC an application letter signed by the chairman of the board of directors, general manager or the person- in-charge of the foreign insurance institution it represents. Upon approval, the withdrawal shall be registered at the relevant administration for industry and commerce. And the Representative Office shall carry out other required procedures at other relevant authorities. Article 25. Any of the following events should be submitted to CISRC for record: (1) Change, increase or decrease in the number of representatives, deputy representatives, foreign staff or staff from Hong Kong, Macao or Taiwan. The ID cards and vita of the person to be appointed shall be submitted for record; or (2) Leave of office of the person-in-charge of the Representative Office. Such event shall be filed and recorded within three days after the Event. Article 26. If the conversion of a Representative Office into a general Representative Office is approved, the original Representative Office shall be withdrawn automatically and it shall carry out withdrawal procedure at the relevant administration for industry and commerce. Article 27. For foreign insurance institutions that have received approval to establish a general Representative Office, if the closing of Representative Offices results in only a Representative Office remaining, the Representative Office shall submit to the President of CISRC an application letter signed by the chairman of the board of directors, general manager or the person-in-charge of the foreign insurance institution it represents requesting the change in status from a general Representative Office to a Representative Office. The original general Representative Office is closed automatically and the Representative Office shall carry out withdrawal procedures at the relevant administration for industry and commerce. Article 28. In case a Representative Office is closed and there is a general Representative Office, the general Representative Office shall be responsible for all outstanding matters of the closed Representative Office. Should there not be a general Representative Office or if same has been closed, the foreign insurance institution shall be responsible for all outstanding matters of the closed Representative Office. Article 29. CISRC shall conduct regular and annual inspections of the Representative Offices. Such inspections include: (1) Whether the approval procedures for the establishment or change of Representative Offices have been completely followed; (2) Whether documents submitted with the application are true or false; (3) Whether procedures for the appointment or change of staff of the Representative Offices have been completely followed; (4) Whether the Representative Office has conducted profitable business activities; (5) Other aspects which CISRC thinks necessary to inspect. CHAPTER IV RESPONSIBILITIES AND PUNISHMENTS Article 30. In case a Representative Office has been established without approval and thus in violation of this regulation, it shall be cancelled by CISRC. Article 31. In case a Representative Office violates this regulation or any other Chinese insurance laws and regulations, it shall have punishments imposed upon it by CISRC, as specified below, according to the seriousness of the offence: (1) Warning or public criticism and correction of the violation within a specified time; (2) Confiscation of illegal proceeds; (3) Disqualification of the general representative, the chief representative, representatives or deputy representatives; (4) Closing of the Representative Office. Article 32. Should violation of this regulation and other Chinese insurance laws and regulations constitute a crime, a Representative Office shall be subject to criminal liabilities. CHAPTER V SUPPLENTARY PROVISIONS Article 33. If original documents required for submission per this regulation, with the exception of the annual financial report, are written I in a foreign language, they shall be submitted with Chinese translation. And the Chinese translation shall prevail. Article 34. This regulation also applies to the establishment of a Representative Office by insurance institutions registered in Hong Kong, Macao or Taiwan. Article 35. This regulation may serve as reference material for the administration of the Representative Offices of foreign insurance institutions that are established with the special approval of CISRC. Article 36. The power to interpret this regulation shall remain with CISRC. Article 37. This regulation comes into force upon promulgation. Should there be any discrepancy between this regulation and the provisions concerning representative offices and their staff of foreign insurance institutions in Regulation on the Administration of Representative Offices of Foreign Financial Institutions in China (April 29, 1996), the Preliminary Regulation on the Qualification of High and Mid-Level Managerial Personnel in Foreign financial Institutions (May 1, 1997) and its Supplementary Measures (July 30, 1997) promulgated by the People's Bank of China, this regulation shall prevail. |
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