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TABLE OF CONTENTS CHAPTER I GENERAL PROVISIONS CHAPTER II CONTROL OF THE ENTRY INTO AND EXIT OUT OF THE MARKET OF THE FOREIGN EXCHANGE BUSINESS FOR INSTITUTIONS OF INSURANCE BUSINESS CHAPTER III CONTROL OF FOREIGN EXCHANGE BUSINESS OF THE INSTITUTIONS OF INSURANCE BUSINESS CHAPTER IV MANAGEMENT OF FOREIGN EXCHANGE RECEIPTS AND EXPENSES OF INSURANCE AGENTS AND INSURANCE BROKER COMPANIES CHAPTER V MANAGEMENT OF LIQUIDATION, SALE AND PAYMENT OF FOREIGN EXCHANGE CONCERNING INSURANCE BUSINESS CHAPTER VI LEGAL LIABILITY CHAPTER VII SUPPLEMENTARY PROVISIONS CHAPTER I GENERAL PROVISIONS Article 1. These provisions are enacted in accordance with the Insurance Law of the People's Republic of China, Regulations of the People's Republic of China on Foreign Exchange Control and Regulations of the People's Republic of China on Foreign-Funded Insurance Companies, for the purpose of regulating the foreign exchange insurance activities within the territory of the People's Republic China, perfecting the management of the foreign exchange insurance. Article 2. The term "foreign exchange insurance" mentioned in the present Interim Provisions refers to a commercial insurance transaction whereby, as contracted, the payment of insurance premiums, indemnification or payment of the insurance benefits are priced and settled in foreign currencies. The foreign exchange insurance includes property insurance in foreign currencies, insurance of the person in foreign currencies and foreign exchange reinsurance. Article 3. The present Interim Provisions apply to the gains and expenses of foreign exchange, liquidations of foreign exchange, sale of foreign exchange, and opening and use of the foreign exchange accounts concerning the operation of foreign exchange insurance within the territory of the People's Republic of China. Article 4. Where insurance companies and their branches (hereinafter referred to institutions of insurance business) conduct insurance business, foreign currencies shall be used in the premium paid by insurance applicants, in the indemnification or payment of insurance benefits paid to the insured (or beneficiary), and in the liquidation of the insurance contracts. Article 5. The State Administration of Foreign Exchange and its branches (hereinafter referred to foreign exchange administration) shall, in accordance with these interim provisions, be in charge of the verification of the qualification for the institutions of foreign exchange to be engaged in the foreign exchange transaction, and be responsible for the supervision and control of the gains and expenses of foreign exchange, fro liquidations of foreign exchange, for sale of foreign exchange, and for foreign exchange accounts. The China Insurance Regulatory Committee and its branches (hereinafter referred to insurance supervision and control committee) shall, in accordance with the Insurance Law and other relevant provisions, perform supervision and control over the foreign exchange business of the insurance operation institutions. Article 6. Foreign exchange insurance activities conducted in China shall be in conformity with the relevant Chinese laws, rules and regulations, and with the relevant rules and regulations stipulated by the foreign exchange administration and the insurance supervision and control committee. CHAPTER II CONTROL OF THE ENTRY INTO AND EXIT OUT OF THE MARKET OF THE FOREIGN EXCHANGE BUSINESS FOR INSTITUTIONS OF INSURANCE BUSINESS Article 7. An application for foreign exchange business such as the foreign exchange insurance conducted by the institutions of insurance business shall be submitted to the foreign exchange administration; upon the verification by the foreign exchange administration, Permit For Operation of Foreign Exchange Business will be issued. An institution of the insurance business shall operate its insurance business within the scope of business approved, shall not operate without authority or operate businesses beyond the scope of the business. Permit For Operation of Foreign Exchange Business is the legal testifying document whereby an institution of insurance business conducts foreign exchange business, which is uniformly printed and issued by the State Administration of Foreign Exchange. Its validity lasts three years. Article 8. Upon verification by the foreign exchange administration, an institution of insurance business may conduct part or whole of the following businesses: (1) foreign exchange property insurance; (2) foreign exchange insurance of the person; (3) foreign exchange reinsurance; (4) foreign exchange maritime insurance; (5) foreign exchange investment; (6) capital credit investigation, enquiry business; and (7) other businesses examined and approved by the State Administration of Foreign Exchange. Foreign exchange property insurance, foreign exchange insurance of the person, and foreign exchange reinsurance undertaken by institutions of insurance business shall be confined to the sorts of insurance examined and approved by the insurance supervision and control committee; foreign exchange investment conducted by institutions of insurance business shall be limited to the investment channels approved by the administrative department of finance under the State Council. Article 9. Insurance companies meeting the following conditions may submit an application for launching foreign exchange business: (1) being approved by the insurance supervision committee to operate insurance business; (2) having the stipulated amount of the received-up foreign exchange capital fund or received-up foreign exchange operation capital fund. In the event of an insurance company as legal person, if its capital fund is more than 500,000,000 Yuan (including 500,000,000 Yuan), it shall have more than US$5,000,000 as the received-up capital fund or other foreign currencies equal to this value. If its capital fund is less than 500,000,000 Yuan, it shall have more than US$2,000,000 as the received-up capital fund or foreign currencies equal to this value. In the event of the branch of an foreign-funded insurance company with a capital fund of more than 500,000,000 Yuan (including 500,000,000 Yuan), the branch shall have an operation capital fund of not less than US$5,000,000 or other foreign currencies equal to this value as the received-up foreign operation capital fund. If the operation capital fund is less than 500,000,000 Yuan, the branch shall have an foreign exchange operation capital fund of not less than US$2,000,000 or other foreign currencies equal to this value as the received-up foreign exchange capital fund; (3) having a perfect domestic control system and capital management system; (4) having management personnel for the business of foreign exchange qualified by the foreign exchange administration; (5) abiding by the law, rules and regulations and other relevant provisions, and not being involved in major acts in violation of rules and regulations or disciplines; and (6) other conditions stipulated by the State Administration of Foreign Exchange. Article 10. When an insurance company applies to the local foreign exchange administration for launching foreign exchange business, it shall submit the documents and materials prescribed as follows. If the application is approved by the local foreign exchange administration, the application shall be submitted level by level up to the State Administration of Foreign Exchange, which shall grant the Permit For Operation of Foreign Exchange Business to the competent insurance company: (1) an application for operation of foreign exchange business and a feasibility study report; (2) the original and copy versions of the Permit For Operation of Foreign Exchange Business granted by the insurance supervision committee; (3) the articles of association of the company approved by the insurance supervision committee ( in the event of a branch of the foreign-funded insurance company, the articles of association of its general company shall be presented); (4) the (original) capital verification report provided by a public accounting firm on the foreign exchange capital fund or foreign exchange operation capital fund of the insurance company; (5) a list of the names of the personnel in charge of the foreign exchange business of the insurance company, their resumes and documents issued by the foreign exchange administration to verify their qualification for the foreign exchange business; (6) the relevant domestic control system and the system of the management of the foreign exchange capital fund; and (7) other documents and materials required by the State Administration of Foreign Exchange. An insurance company may, after being granted the Permit For Operation of Foreign Exchange Business issued by the State Administration of Foreign Exchange, authorize its branches to present an application for the business of foreign exchange to the local foreign exchange administration. Article 11. When the branch of an insurance company applies to the local foreign exchange administration for the business of foreign exchange, the branch shall submit the following documents and materials. If the application is approved by the local foreign exchange administration, the application shall be submitted to the branch of foreign exchange administration at the higher level for verification, which shall grant the Permit For Operation of Foreign Exchange Business to the competent insurance company. Each branch of the foreign exchange administration shall, within one month after verification of the foreign exchange business of the branch of the insurance company, present the application for record to the State Administration of Foreign Exchange: (1) the authorization granted by the insurance company with which it is affiliated to permit it to engage in operation of foreign exchange business; (2) an application for launching the business of foreign exchange (including the needs of the foreign exchange business, the allocation of the personnel, the business premises and facilities); (3) the original and copy versions of the Permit For Operation of Insurance Business and Permit For Operation of Foreign Exchange Business of the insurance company that it is affiliated with; (4) a list of names of the personnel in charge of the foreign exchange business, their resumes and documents issued by the foreign exchange administration to verify their qualification for the foreign exchange business; (5) the relevant domestic control system and the system of the management of the foreign exchange capital fund; and (6) other documents and materials required by the State Administration of Foreign Exchange. Article 12. Institutions of insurance business may, according to the development of the insurance business, and in accordance with the procedures specified in Article 10 and Article 11 of the present Interim Provisions, submit the following documents and materials to the foreign exchange administration for an application for an amplification of their business: (1) an application for the amplification of the foreign exchange business and a feasibility study report; (2) operation of the foreign exchange business and the financial report within the validity of the Permit For Operation of Foreign Exchange Business; (3) the original and copy versions of the Permit For Operation of Foreign Exchange Business; (4) a newly added list of names of the personnel in charge of the foreign exchange business, their resumes and documents issued by the foreign exchange administration to verify their qualification for the foreign exchange business; (5) the relevant domestic control system and the system of the management of the foreign exchange capital fund; and (6) other documents and materials required by the State Administration of Foreign Exchange. Article 13. If upon the expiration of the Permit For Operation of Foreign Exchange Business, an institution of insurance business continues the business of foreign exchange, the unit shall, three months prior to the expiration of the permit, in accordance with the procedures stipulated in Article 10 and Article 11 of the present Interim Provisions, file the following documents and material to the foreign exchange administration for an application for reverification of its qualification for operation of foreign exchange business: (1) an application for the continuation of operation of foreign exchange business; (2) a report on the business of the foreign exchange and financial conditions of the recent three years; (3) the audit report on the foreign exchange capital fund and foreign exchange capital fund for operation provided by a public accounting firm; (4) the original and copy of the Permit For Operation of Foreign Exchange Business issued for the first time; and (5) other documents and materials required by the foreign exchange administration. In the event of the branch of an insurance company, the branch may provide the authorization entrusted by insurance company at the higher level that consents with its continuation of the foreign exchange business, instead of the audit report prescribed in term three of the proceeding article. Article 14. If an institution of insurance business terminates its foreign exchange business, the unit shall, according to the procedures of Article 10 and Article 11 of the present Interim Provisions, submit the following documents and materials to the foreign exchange administration for an application for termination: (1) an application for termination of the business of foreign exchange; (2) detailed explanation of the termination of the foreign exchange business (including reasons for termination of the foreign exchange business, measures and procedures to handle the claims and debts after the termination of the business); (3) the original and copy versions of the Permit For Foreign Exchange Business; (4) a financial report on the (5) the document signed by the board of directors or by the company at the higher level which approves the termination of the foreign exchange business; and (6) other documents and materials required by the foreign exchange administration. Article 15. If an institution of insurance business meets any of the following circumstances, the foreign exchange administration shall terminate its business of foreign exchange, and rescind or suspend its Permit For Foreign Exchange Business: (1) if an institution of insurance business is dissolved due to division or merger of this unit, or due to the occurrence of a cause for its dissolution stipulated by the unit's articles of association; (2) if its Permit for Foreign Exchange Business is suspended by the insurance supervision committee; (3) if the unit is declared bankrupt by the People's court; or (4) other circumstances stipulated by laws, rules and regulations. Article 16. The foreign exchange administration shall, within three months after the receipt of the complete documents submitted by an institution of insurance business for the application for launching, amplification, and reverification of the foreign exchange business, make decision to grant verification or not, and shall notify the unit of insurance business in the written form. If upon verification, an institution of insurance business is permitted to run foreign exchange business, the unit shall, within one month from the receipt of the verifying documents, apply to the State Administration of Foreign Exchange or to its branch for the Permit For Operation of Foreign Exchange Business. Failure to apply for the permit after expiration shall automatically make invalid the verifying documents issued by the foreign exchange administration. If the foreign exchange administration refuses to verify the foreign exchange business conducted by an institution of insurance business, the institution shall not, within one year after the decision of refusal, apply for operation of foreign exchange business. If upon verification, the foreign exchange administration terminates the foreign exchange business conducted by an institution of insurance business, the institution shall, within one month after receipt of the verifying document, turn in to the original organ that has issued the certificate the Permit For Operation of Foreign Exchange Business for cancellation. CHAPTER III CONTROL OF FOREIGN EXCHANGE BUSINESS OF THE INSTITUTIONS OF INSURANCE BUSINESS Article 17. An insurance company shall, in accordance with the Insurance Law of the People's Republic of China and the relevant provisions stipulated by the insurance supervision committee, set aside in full and timely a reserve fund for the foreign exchange insurance, and shall abide by the index supervising the capacity of indemnity or payment of the insured amount and the index guiding the use of fund drawn up by the insurance supervision committee. Article 18. An insurance company shall confine its use of the foreign exchange fund to the form in which fund is used as stipulated by the State Council, and shall, as stipulated, apply to the State Administration of Foreign Exchange for a special foreign exchange account to manage the exertion of foreign exchange. Article 19. If an insurance company conducts foreign exchange maritime insurance, it shall comply with the State provisions to guide the external insurance. Article 20. If an institution of insurance business is granted to operate foreign exchange business, it may open a foreign exchange account in a domestic bank, and present the account to the local foreign exchange administration for record within 10 days after the opening of the account. If the development of an insurance company's business makes it necessary to open an account abroad, this matter shall be approved by the foreign exchange administration that has issued the Permit For Operation of Foreign Exchange Business. Branches of an insurance company shall not open foreign exchange account abroad. Article 21. The scope of foreign exchange operation account of an institution of insurance business is stipulated as follows: (1) gains and expenses of foreign exchange charge; (2) gains and expenses of foreign exchange indemnification or payment of the insured amount; (3) gains and expenses arising from inward reinsurance charge and the relevant service charge; (4) gains and expenses of indemnification or payment of the insured amount arising from foreign exchange reinsurance; and (5) gains and expenses out of other foreign exchange for current account transactions and approved foreign exchange for capital account transactions. Article 22. In the event of foreign exchange capital fund circulation between an insurance company and its branches, and of foreign exchange capital fund circulation among foreign exchange accounts of the same unit of insurance business, the domestic transfer may directly be handled in the bank where the foreign exchange account is opened. Article 23. If an insurance company converts foreign exchange capital fund or capital fund for operation into RMB capital fund or RMB capital fund for operation, the matter shall be approved by the State Foreign Exchange, and vice versa. If an inadequacy of foreign exchange capital fund is caused by the losses which an insurance company suffers from its operation, a balance may, upon approval by the State Foreign Exchange Bureau, be made by purchasing foreign exchange on basis of the annual accounting year. If an inadequacy of foreign exchange capital fund is caused by the loss of a branch of an insurance company, a balance may, upon approval by the State Administration of Foreign Exchange, be made by its general insurance company on basis of the fiscal year. After the termination of foreign exchange business and the cleaning of the foreign exchange the claims and debts, an institution of insurance business shall liquidate the remains of the foreign exchange. Article 24. The surplus of the net gains and interests in foreign currencies of an insurance company after deducting the foreign exchange for compensation for the loss of the company and setting aside the foreign exchange accumulated fund shall, within 4 months after the termination of the fiscal year, or within 10 days after the approval of the annual distribution program by the board of directors, be liquidated, and shall be submitted to the State Administration of Foreign Exchange for record within 5 days after the liquidation. Foreign exchange gains and interests distributed to foreign shareholders in a foreign-funded insurance company according to the resolution of the board of directors or according to the documents of the insurance supervision committee may be remitted through approval by the local foreign exchange administration. In addition, the gains and interests distribution in RMB currency may be exchanged into foreign currencies and remitted through approval by the local foreign exchange administration. Article 25. Financial management associated with the foreign exchange business of an institution of insurance business shall be conducted in conformity with the relevant management systems of the State. A sound internal control system, management system of foreign exchange, and financial system of foreign exchange as well for the foreign exchange business shall be established. Foreign exchange accounts shall be separated. An insurance company shall, within 4 months after the termination of each fiscal year, submit to the State Administration of Foreign Exchange and the China Insurance Regulatory Committee all sorts of financial statements, such as the mergence balance sheets of foreign currencies. Article 26. An institution of insurance business shall, according to the relevant State provisions on application for statistics of international gains and expenses, handle the procedures for applications for such statistics. Article 27. Foreign exchange bureaus may by themselves make on-the-spot or off-the-spot inspection of the foreign exchange business conducted by institutions of insurance business, by insurance agents, or by insurance brokers, or have the inspection done by designating a public accounting firm or an audit firm to audit the foreign exchange business. Institutions of insurance business, insurance agents, or insurance brokers under inspection shall accept the inspection and cooperate with the inspectors or auditors. Article 28. An institution of insurance business shall, in accordance with the requirements of the insurance supervision committee, supply true, complete, and timely relevant information and materials. CHAPTER IV MANAGEMENT OF FOREIGN EXCHANGE RECEIPTS AND EXPENSES OF INSURANCE AGENTS AND INSURANCE BROKER COMPANIES Article 29. Upon approval by the insurance supervision committee, an insurance agent, or insurance broker company entitled to the qualification to undertake intermediary insurance business may practice the intermediary insurance business. Article 30. Receipts such as commissions owned by an insurance company through the foreign exchange insurance agency within the territory of the People's Republic of China shall be priced and settled in Renmibi. Without authorization by the foreign exchange administration, no insurance agent shall on itself behalf collect foreign exchange premiums. Article 31. An insurance broker company may on behalf of its clients pay premiums, or indemnify or pay for the insured amount in foreign exchange concluded in a foreign exchange contract, but shall not purchase foreign exchange in its clients' interest to pay for the proceeding fees. Receipts in foreign exchange owned by an insurance broker company out of the foreign exchange insurance broking shall be liquidated within 3 months after the termination of each fiscal year, or within 10 days after the board of directors approve the distribution program of the current year. The matter shall be reported to the local foreign exchange administration for record within 5 days after the liquidation. Article 32. Upon approval by the local foreign exchange administration, an insurance broker company may open a special foreign exchange account, whose scope of gains and expenses are specified as follows: (1) temporarily kept premiums collected from the insurance applicants, institutions of insurance business, or insurance companies abroad; (2) temporarily kept indemnification or payment of the insurance benefits obtained from an institution of insurance business or an insurance company abroad; (3) temporarily kept indemnification or payment of the insurance benefits to be paid to an institution of insurance business or an insurance company abroad; (4) temporarily kept indemnification or payment of the insurance benefits to be paid to the insurance applicants, an institution of insurance business, or an insurance company abroad; and (5) liquidation of the brokerage. CHAPTER V MANAGEMENT OF LIQUIDATION, SALE AND PAYMENT OF FOREIGN EXCHANGE CONCERNING INSURANCE BUSINESS Article 33. In the event that property insurance satisfies one of the following conditions, foreign exchange may be used in collection of premiums, indemnification or payment for the insurance benefits, or in the liquidation of insurance contracts; (1) if the subject matter of the insurance contract shifts between the inside and outside of the People's Republic of China; (2) if the subject matter of the insurance contract exists or is realized out of the territory of the People's Republic of China; (3) if the subject matter of the insurance contract exists in the territory of the People's Republic of China, or exists or is realized through international leases, loans by international syndicate credit, and other means of financing; or (4) if both the applicant and beneficiary are an external legal person and natural person. Article 34. In the event that an insurance of the person meets one of the following conditions, foreign exchange may be used in collection of premiums, indemnification or payment of the insurance benefits, or in the liquidation of insurance contracts: (1) if an applicant is an external legal person or an external organization stationed in China, and the beneficiary is an external natural person; or (2) if a domestic citizen applies for an external accident insurance or a medical insurance. Article 35. Foreign exchange property insurances and person insurances that are consistent with the provisions of Article 33 and Article 34 may undergo reinsurance within the territory of the People's Republic of China. With respect to other insurances that are inconsistent with the provisions stipulated in Article 33 and item (1) of Article 34, Renminbi shall be used in collection of premiums, indemnification or payment for the insurance benefits, or in the liquidation of insurance contracts in the territory within the People's Republic of China. Article 36. Foreign exchange premiums that an applicant is to pay to the institution of insurance business according to the insurance contract may, on basis of the insurance contract and the notice signed by the institution of insurance business that informs the applicant to pay the premium, be realized with foreign currency drawn out of the applicant's foreign exchange account or with the foreign exchange purchased from a designated bank. If the applicant is an external legal person, or an external natural person, or an external organization stationed in China, no foreign exchange shall be purchased to pay the premiums. When an institution of insurance business conducts indemnification or payment of the insured amount to the applicants (or the beneficiaries), the institution shall present relevant insurance contracts, indemnification or payment statements. The indemnification or payment shall be realized with foreign exchange drawn out of its account. Article 37. If the beneficiaries are legal persons or other economic organizations, the indemnification or payment of the insurance benefits concerning the insurance contract may be deposited into the current foreign exchange accounts, or have the foreign exchange liquidated. If the beneficiaries fail to open any current accounts or if the indemnification or payment exceeds the maximum of its current foreign exchange account, liquidation shall be conducted. If the beneficiaries are natural persons, he may hold the foreign exchange indemnification or payment of the insurance benefits concerning the insurance contract, or deposit the foreign exchange into in a financial organization that conducts foreign exchange business, or have it liquidated. Article 38. If an institution of insurance business engages in outward reinsurance with respect to a foreign exchange insurance, it shall, on the basis of the outward reinsurance contract and the payment statement, pay the premium with foreign exchange drawn out of its foreign exchange. If an institution of insurance business engages in outward reinsurance with respect to an insurance contract settled in Renminbi, it may apply to the State Administration of Foreign Exchange for purchase of foreign exchange to pay the premium. An institution of insurance business shall repatriate the indemnification or payment of the insured amount and other charges arising from reinsurance into its foreign exchange account in China. Article 39. If an institution of insurance business accepts inward foreign exchange insurance business, it shall repatriate the gains arising from the reinsurance in good time into its foreign exchange account in China. When an institution of insurance business pays for indemnity or payment of the insurance benefits and other charges as a result of an inward reinsurance, it shall present relevant insurance contracts, or payment statements concerning the inward reinsurance. The indemnity or payment shall be realized with foreign exchange drawn out of its account. Article 40. When an institution of insurance business fulfils its obligations for foreign exchange insurance premiums, indemnity or payment of the sum insured and other relevant charges concerning the joint insurance entity or the coinsurance, it shall on basis of the joint articles of association, coinsurance agreement, or certificates like a notice of payment, pay the proceeding amount with foreign exchange drawn out of its account. Article 41. When an institution of insurance business handles returning of foreign exchange insurance premiums paid, it shall, on basis of the insurance contract, or certificates such as an agreement on returning of the premiums paid, fulfill the payment with foreign exchange drawn out of its account. Article 42. In the event that foreign exchange insurance transactions are conducted through a domestic insurance broker company, foreign exchange shall be purchased or sold in accordance with the following particulars: (1) When an applicant pays insurance premiums to an insurance broker company, he shall offer the relevant insurance contract, the entrustment for insurance broking, and notice of payment, and get the premium paid with foreign exchange drawn out of his account or with the foreign exchange purchased in a designated bank; when an insurance broker company pays the premium in turn to an institution of insurance business, the broker company shall offer the insurance contract, the authorization for insurance broker, and notice of payment, and get the premium paid with foreign exchange drawn out of his account. When an institution of insurance business indemnifies or pays the sum insured to the insured or beneficiary through an insurance broker company, the institution shall present the insurance contract calculation of the indemnity or payment of the sum insured, and the entrustment for insurance broker, and get the indemnity or payment of the sum insured fulfilled with foreign exchange drawn out of its account; (2) When an institution of insurance business engaged in transaction of outward foreign exchange reinsurance business pays the reinsurance charges, and when an insurance broker company pays the reinsurance charges to an institution of insurance business which accepts an inward foreign exchange reinsurance, the institution and the company shall provide the relevant insurance contract, authorization for insurance broker business and statements of payment, and shall get the reinsurance charges paid with the foreign exchange drawn out of their accounts. When an institution of insurance business that accepts an inward reinsurance pays its share of the indemnity or payment of the insurance benefits and the relevant charges to the institution that transacts the outward foreign exchange reinsurance business through an insurance broker company, the former shall offer the relevant reinsurance contract, statements of liquidation and the entrustment for insurance business, and shall get the indemnity or payment of the insurance benefits fulfilled with foreign exchange drawn out of its account; (3) When an institution of insurance business handles matters concerning the returning of the premiums paid to the applicant, it shall offer the relevant insurance contract, the agreement on the returning of the premiums and entrustment for the insurance broker business, and shall get the returning of the premiums fulfilled with foreign exchange drawn out of its account. Article 43. When the designated banks handle the gains and expenses of insurance premiums and indemnity or payment of the insurance benefits concerning the foreign exchange insurance business, and the cashing procedures, they shall strictly examine and verify the relevant valid certificates and commercial bills, and keep them 5 years for future reference. CHAPTER VI LEGAL LIABILITY Article 44. Any institution of insurance business that, without verification, operates foreign exchange business, shall be ordered to terminate the foreign exchange business, have returned the premiums received, have confiscated the illegal gains if any, and have imposed a fine of not less than 100,000 Yuan and not more than 500,000 Yuan by the foreign exchange administration; shall be investigated for criminal responsibility according to law if a crime is constituted. Any institution of insurance business that operates without authorization beyond the verified business scope in conducting foreign exchange transactions, or continues to conduct the relevant foreign exchange business after the foreign exchange revokes or suspends part of its foreign exchange business, shall be ordered to make corrections, return the premiums received, have confiscated its illegal gains if any, and have imposed a fine of not less than 100,000 Yuan and not more than 500,000 Yuan by the foreign exchange administration; shall be suspended or have revoked the permit for operation of foreign exchange business by the foreign exchange administration if the circumstances are serious.; or shall be investigated for criminal responsibility according to law if a crime is constituted. Article 45. Any institution of insurance business that, in violation of the present Interim Provisions, collect premiums, indemnify or pay for the insurance benefits, or conduct liquidation in foreign exchange concerning insurance contracts that fail to satisfy the prescribed conditions, shall be ordered to make corrections, have confiscated its illegal gains if any, shall only or shall also be given a warning, have circulated a notice of criticism, and shall be fined a sum in Renminbi not more than the illegally used foreign exchange in value by the foreign exchange administration. Article 46. Any institution of insurance business that, in violation of the prescribed provisions, intercepts the relevant gains resulting from the reinsurance business abroad, or conducts foreign exchange evasion or illegally purchase foreign exchange, or purchase foreign exchanges cheatingly by counterfeiting or altering insurance contracts or liquidation bills, and other valid certificates and commercial bills, or by using counterfeited, or altered insurance contracts or liquidation bills and other valid certificates and commercial bills and by illegally using or reusing the insurance contracts, or liquidation bills and other valid certificates and commercial bills, shall be punished by the foreign exchange administration in accordance with the provisions stipulated in Article 39 and Article 40 of the Regulations of the Peo0le's Republic of China on Foreign Exchange Control; or shall be investigated for criminal responsibility according to law if a crime is constituted. Article 47. Without approval by the foreign exchange administration, whoever purchase foreign exchange capital funds or foreign exchange operation funds with Renminbi currency, or convert foreign exchange capital funds or foreign exchange operation funds into Renminbi, or fails to liquidate the net gains and interests of foreign exchange according to the relevant provisions, shall be ordered to make corrections, shall only or shall also be given a warning, have circulated a notice of criticism, and shall be fined not less than 10,000 Yuan and not more than 30,000 Yuan. Article 48. Whoever, in violation of the present Interim Provisions, fails to set aside the reserve fund, or otherwise violates the provisions on supervision and control over the insurance companies'capability to indemnify or pay for the insurance benefits, shall be punished by the insurance supervision committee. If the circumstances are serious, its scope of business may be restrained and its permit for operation of foreign exchange business may be suspended or revoked by the foreign exchange administration. Article 49. Any institution of insurance business, insurance broker company, or insurance agent, in violation of the present Interim Provisions, without approval by the foreign exchange, opens foreign exchange accounts, or lends or transfers its foreign exchange account, or uses foreign exchange by altering the scope of the foreign exchange gains and expenses, or fails to handle procedures to get the foreign exchange accounts recorded, shall be order to make corrections, shall only or shall also be given a warning, have circulated a notice of criticism, and shall have imposed a fine of not less than 50,000 Yuan but not more than 300,000 Yuan. If the circumstances are serious and corrections fail to be made by a certain date, its foreign exchange account shall be revoked. Article 50. Where any institution of insurance business, insurance broker company, without approval by the insurance supervision, obtains the qualification to conduct intermediary insurance business or operates intermediary insurance business beyond the scope of business, the illegal gains shall be confiscated, and a fine of not less than one time and not more than five times the amount of the illegal gains shall be imposed upon the offender by the foreign exchange administration, and shall be investigated for criminal responsibility if a crime is constituted. Article 51. Whoever refuses to accept the supervision by the foreign exchange administrations or prevents the foreign exchange administrations from the supervision in other ways shall be order to make corrections, be given a warning, have circulated a notice of criticism, and shall have imposed a fine of not less than 10,000 Yuan and not more than 30,000 Yuan by the foreign exchange administration. Article 52. Any institution of insurance business, in violation of the present Interim Provisions, fails to submit statement and relevant information and materials, shall be order to make corrections, be given a warning, have circulated a notice of criticism, and shall have imposed a fine of not less than 50,000 Yuan and not more than 300,000 Yuan by the foreign exchange administration. CHAPTER VII SUPPLEMENTARY PROVISIONS Article 53. The meanings of the terms used in the present Interim Provisions are as follows: (1) "Insurance companies" means enterprises which upon approval by the insurance supervision committee operate commercial insurance business in the territory of the PRC, and are registered as legal persons, as well as branches established by foreign insurance companies upon approval by the insurance supervision committee in the territory of the PRC; (2) "Insurance contracts" means written insurance contracts or agreements concluded in the forms of insurance vouchers, of insurance certificates, of temporary insurance vouchers, and of insurance bills that meet the provisions of the Contract Law of the PRC and the Insurance Law of the PRC. Article 54. Management of the entry into and exit out of the market of foreign exchange business operated by insurance companies involved in the policy insurance business such as export credit insurance, and management of the gains and expenses of foreign exchange, of liquidation of foreign exchange, of sale of foreign exchange, and of foreign exchange and the like covered in a insurance contract shall be conducted with reference to the present Interim Provisions. Article 55. The power to interpret the present Interim Provisions shall remain with the State Administration of Foreign Exchange. Article 56. The present Interim Provisions shall come into force as of November, 1, 2002. If Regulations on the Administration of the Foreign Exchange Business of Non-bank Financial Institutions promulgated on January 1, 19993 and relevant provisions prescribed in any other regulation on the administration of foreign exchange conflict with the present Interim Provisions, the present Interim Provisions shall prevail. |
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