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	CIRCULAR OF THE CHINA INSURANCE REGULATORY COMMISSION ON RELEVANT ISSUES CONCERNING THE BUSINESS AREAS OF INSURANCE COMPANIES

	(No. 120 [2003] of the China Insurance Regulatory Commission promulgated on September 2, 2003 and shall come into force as of October 1, 2003)


SUBJECT : INSURANCE COMPANIES; BUSINESS AREAS
ISSUING DEPARTMENT : CHINA INSURANCE REGULATORY COMMISSION
ISSUE DATE : 09/02/2003
IMPLEMENT DATE : 10/01/2003
LENGTH : 475 words
TEXT :

In order to speed up the development of the insurance market, the China Insurance Regulatory Commission decides, from October 1, 2003, to further release the restrictions on the business areas of insurance companies, and hereby notifies the relevant issues as follows:

I. Where an insurance company has established branches at the provinces, autonomous regions, or municipalities directly under the Central Government, it may, on the precondition of strengthening management, controlling risks, and ensuring services, carry out business through special insurance intermediary companies or by way of setting up service departments for marketing within the administrative divisions of the provinces, autonomous regions, or municipalities directly under the Central Government. No insurance company or any of its branches may entrust any part-time insurance agency institution located outside the place of their registration to carry out business in different places.

II. Where any branch of an insurance company alters its business areas, it shall have the business areas in the license altered at the local insurance regulatory office upon the strength of the written letter of authority of the parent company.

III. Before December 11, 2004, the business areas of the insurance companies with foreign investment and insurance joint venture companies shall be only limited to the open cities stipulated in the agreement.

IV. Where an insurance company carries out business through insurance intermediary institutions, it shall set up a special department or post for the management of the insurance intermediary business, establish and improve relevant systems for management and internal control, earnestly strengthen the management on the insurance intermediary business, and urge it to carry out business legally, so as to ensure the level of business management and the quality of customer service.

V. Where an insurance company plans to carry out business through an insurance intermediary company, it shall sign insurance intermediary contract with the insurance intermediary company beforehand, clarifying the liabilities and duties with respect to insurance services, and shall set up a special account book for recording the insurance intermediary business, and submit the insurance intermediary contract to the local office of insurance regulatory commission.

VI. The insurance intermediary companies, insurance brokering companies and insurance survey and loss adjustment companies shall carry out their business in strict accordance with the "Provisions on the Administration of Insurance Agencies", "Provisions on the Administration of Insurance Brokering Companies", and the "Provisions on the Administration Insurance Assessment Institutions".

VII. All the insurance regulatory offices shall strengthen supervision over the insurance intermediary business of the insurance companies, for those insurance companies without sound systems, and failing to manage and control efficiently, or the business management and the customer service of which is lagged behind, or even carrying out business in violation of laws and regulations, the offices may limit their business areas and scope of business, and may even render them and the relevant leaders subject to legal liabilities.