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Article 1. The Detailed Rules for the Implementation of the Administrative Regulation of the People's Republic of China on Foreign-funded Insurance Companies (hereinafter referred to the present Detailed Rules) are formulated in accordance with the Insurance Law of the People's Republic of China and the Administrative Regulation of the People's Republic of China on Foreign-funded Insurance Companies (hereinafter referred to the ARFFIC). Article 2. The term "foreign insurance companies" mentioned in the present Detailed Rules refers to the insurance companies registered outside China for engaging in the insurance business. Article 3. Where a foreign insurance company establishes a joint equity insurance company within the territory of China with a Chinese company or enterprise for engaging in the personal insurance business (hereinafter referred to joint equity life insurance company), the foreign stakes shall not exceed 50% of the total of this joint equity insurance company. The shares held directly or indirectly held by the foreign insurance company in the joint equity life insurance company shall not exceed the percentage limit mentioned in the preceding paragraph. Article 4. A foreign-funded insurance company, which was established within the territory of China before the ARFFIC comes into effect and whose registered capital or operating fund is less than RMB 200 million yuan or equivalent amount in convertible currencies, shall pay the full amount within 2 years after the present Detailed Rules takes effect. If it fails to do so, the China Insurance Regulatory Commission (hereinafter referred to the CIRC) shall not grant approval to its application for carrying out any new business. Article 5. The registered capital or operating fund of a foreign-funded insurance company shall be actually paid monetary investment. Article 6. After the establishment of a branch of foreign insurance company, the foreign insurance company shall not withdraw the operating fund by any means. Article 7. The sentence "It shall have been engaged in the insurance business for 30 years or more" in Article 8 (1) of the ARFFIC means that a foreign insurance company shall have been engaged in the insurance business for more than 30 consecutive years. Its merging other institutions or establishing new insurance companies by merging other institutions shall not affect the calculation of the number of years of engagement in the insurance business. The number of years of engagement in the insurance business of the branches of a foreign insurance company shall be calculated from the day when it is established. Article 8. The term "a representative office" mentioned in Article 8 (2) of the ARFFIC refers to either of the following representative offices approved by CIRC: (1) The representative office established by the foreign insurance company; or (2) The representative office established by the company group, to which the foreign insurance company belongs. Article 9. The representative office established by the foreign insurance company or by the company group, to which it belongs to, shall only apply for establishing one foreign-funded insurance company. Article 10. The expression "by the end of the year prior to the application for establishment" mentioned in the Article (3) of the ARFFIC refers to by the end of the previous fiscal year calculated from the day when it is established. Article 11. The expression "other prudent conditions" mentioned in Article 8 (7) of the ARFFIC shall include at least: (1) a reasonable legal personal governance structure; (2) a stable and sound risk control system; (3) a perfect internal control system; (4) an efficient management information system; and (5) a good business operation standing with no record of serious violations. Article 12. If an applicant is unable to provide the business license (duplicate) required in Article 9 (2) of the ARFFIC, it may offer a valid photocopy of the business license or a written certification issued by the relevant administrative authority for proving that the applicant is entitled to engage in the insurance business. Article 13. The expression "a certification issued by relevant administrative authority of the country or region for proving that it meets the solvency standards" mentioned in Article 9 (2) of the ARFFIC shall include at least any of the following items: (1) In the previous fiscal year calculated from the day when the relevant administrative authority issues the certification, the solvency of applicant meets the supervision requirements of this country or region; or (2) In the previous fiscal year calculated from the day when the relevant administrative authority issues the certification, the applicant shall have no record of failing to meet the standards of this country or region on solvency. Article 14. The expression "opinions of the relevant administrative authority of the country or region about the application" mentioned in Article 9 (2) of the ARFFIC shall include the following items: (1) Whether the applicant's application for establishing an insurance institution within China is in line with the laws and regulations of this country or region; (2) Whether the application of the applicant is to be approved; and (3) The applicant's punishment records during the recent 3 years calculated from the day when the relevant administrative authority issues the opinions. Article 15. The "annual statements" mentioned in Article 9 (3) of the ARFFIC shall include the recent 3 fiscal years of asset-liability statements, profit statements and cash flow statements. The statements listed in the preceding paragraph shall be accompanied by the auditing opinions issued by an accounting firm or auditing firm acknowledged by the country or region where the applicant is located. Article 16. Unless it is otherwise provided for in any of the laws and administrative regulations or approved by the State Council, the "Chinese applicant" mentioned in Article 9 (4) of ARFFIC shall meet the following conditions: (1) It shall be a company or enterprise that has been registered in the administrative department of industry and commerce and has the status of a legal person, excluding the commercial banks, securities institutions and the foreign-funded enterprises provided for by the Foreign-funded Enterprise Law of the People's Republic of China; (2) It shall be approved by the administrative organ of the enterprise or by the assembly of shareholders; (3) It's in a good business situation and has profits in the previous fiscal year calculated from the application date; and (4) It makes investments by using its own fund, whose source is legal. Article 17. In the establishment of a joint equity insurance company, the Chinese applicant shall submit the pertinent materials, including its business license (duplicate), articles of association, business structure, operating history, annual statements of the recent 3 years and punishment records of the recent 3 years. Article 18. The person in charge of the preparatory establishment of a foreign-funded insurance company shall: (1) have college education background or higher; (2) have been engaged in insurance or related work for 2 years or more; and (3) have no illegal and criminal record. Article 19. Where an applicant applies for extending the preparatory establishment period in accordance with Article 11 of the ARFFIC, it shall submit a written application to the CIRC within 1 month before the preparatory establishment period expires, and make an explanation. Article 20. The "report on the preparatory establishment" mentioned in Article 11 (1) of ARFFIC shall cover comprehensive statement about all the items listed in this Article. Article 21. The "legal appraisal institution" mentioned in Article 11 (4) of the ARFFIC refers to an accounting firm that meets the requirements of the CIRC. Article 22. The "certification of capital verification" mentioned in Article 11 (4) of the ARFFIC shall include: (1) a capital verification report issued by a legal appraisal institution; and (2) a photocopy of the original document for the registered capital or operating fund deposited into the bank account. Article 23. The "person-in-charge of the to-be-established company" mentioned in Article 11 (5) of the ARFFIC refers to the general manager of the to-be-established branch of the foreign insurance company. The authorization to the candidate person-in-charge of the branch of the foreign insurance company refers to the authorization signed by the chairman of the board of directors or the general manager of the foreign insurance company to the candidate person-in-charge of the said branch. The authorization letter shall explicitly specify the powers of the authorized. Article 24. The senior managerial personnel of the to-be-established company mentioned in Article 11 (6) of the ARFFIC shall meet the appointment qualification requirements provided for by the CIRC. The senior managerial personnel of the branch of the foreign insurance company shall satisfy the appointment qualification requirements for the senior managerial personnel of the head office of the insurance company. Article 25. The materials of the business site of the to- be-established company mentioned in Article 11 (9) of the ARFFIC refers to the certification documents about the ownership or use right of the business site. The "materials of other facilities relating to business operation of the to- be-established company" mentioned in Article 11 (9) of the ARFFIC at least include the outfitting of computers, construction of network, and information management system. Article 26. The following documents or materials, which the ARFFIC and the present Detailed Rules require the foreign insurance company to submit in the establishment of a foreign-funded insurance, shall be notarized by a notary institution lawfully established in the country or region where the foreign insurance company is located or be authenticated by the embassy or consulate of the country or region based in China: (1) The business license (duplicate) or valid photography of the business license; (2) The authorization letter to the candidate person-in-charge of the branch of the foreign insurance company; and (3) The guaranty letter of the foreign insurance company concerning the liabilities for the tax-related affairs and debts of the branch of the foreign insurance company within China. Article 27. A foreign-funded insurance company may apply for establishing branch institutions in light of its business development. The branches of foreign-funded insurance companies can only conduct their business activities within the administrative area of the province, autonomous region, or municipality directly under the Central Government where it is located. Where a joint equity insurance company or solely funded insurance company is to engage in the insurance business beyond the province, autonomous region, or municipality directly under the Central Government where it is registered, it shall establish branches. A foreign insurance company may, in light of the actual circumstances, establish branches, central branches, sub-branches, business departments and distribution and service departments. Where it is otherwise provided for by the CIRC on the establishment and administration of distribution and service departments, the latter shall be followed. Article 28. Where a joint-funded insurance company or solely funded insurance company is established with the minimum registered capital of RMB 200 million yuan, it shall increase its registered capital by not less than RMB 20 million yuan when it applies for establishing its branch in every province, autonomous region, or municipality directly under the Central Government other than the registered place. When applying for a branch company, if the registered capital of the joint equity insurance company or solely funded insurance company reaches the amount of the after-increase amount prescribed in the preceding paragraph, it does not have to increase the registered capital accordingly. With regard to a joint equity insurance company or solely funded insurance company whose registered capital attains to RMB 500 million yuan, it does not have to increase the registered capital in the establishment of branches if it is fully solvent. Article 29. A foreign-funded insurance company shall meet the following conditions when applying for establishing a branch institution: (1) The amount of solvency meets the relevant requirements of the CIRC; (2) It has perfect internal control system, and has no punishment record. It has engaged in insurance business for more than 2 years, and has no punishment record within the recent 2 years; and (3) Having senior managerial personnel for the branch institution who meet the qualifications and conditions required by the CIRC. Article 30. In the establishment of a branch, a foreign-funded insurance company shall file an application to the CIRC and submit the following materials in triplicate: (1) An establishment application; (2) The un-audited reports on the solvency by the end of the previous year and recent quarter; (3) A 3-year business development plan and market analyses for the to-be-established branch; and (4) The resume and relevant certification materials of the person to be in charge of the preparation of the to-be-established institution. Article 31. The CIRC shall examine the application for establishing a branch institution, an shall make a decision of approval or disapproval within 20 days as of the receipt of the complete set of application materials. If it decides to disapprove, it shall give a written notice to the applicant to explain the reason. After the application has been approved, the applicant shall complete the preparatory establishment of the branch within 6 months. If it fails to do so within the time limit with justifiable reasons, the time limit may be extended for 3 months upon approval of the CIRC. If it fails to complete the preparatory establishment within the extended time limit, the said approval documents of the CIRC shall be invalidated automatically. The preparatory institution shall not engage in any insurance business. Article 32. After having completed the preparatory establishment work of the branch institution, the applicant shall file an application to the CIRC for starting business, and shall submit the following materials in triplicate: (1) An business start-up application; (2) The report on the completion of the preparatory work; (3) The resume and relevant certifications of the candidate senior managerial personnel; and (4) The relevant certifications of the ownership or use right of the business place of the to-be-established branch institution, the situation of the outfit of computers and construction of network, an introduction to the instrumentalities and the information about the practitioners. Article 33. The CIRC shall make a decision of approval or disapproval within 20 day as of the receipt of the complete set of business start-up application documents for the branch. If it decides to approve, shall issue the applicant a branch license for engagement in the insurance business. If it decides to disapprove, it shall give a written notice to the applicant and make explanations. A branch of insurance company approved to start business shall go through the registration formalities in the administrative department for industry and commerce upon the strength of the approval documents and branch license for engagement in the insurance business. It shall not start business until it has obtained the business license. Article 34. The relevant provisions of the CIRC shall apply to the examination and management of the appointment qualifications for the senior managerial personnel of the foreign-funded insurance companies and their branches unless it is otherwise provided for in the present Detailed Rules. Article 35. Where a joint equity or solely-funded property insurance company applies for dissolution due to split, merger or any other reason prescribed in the articles of association, it shall file an application with the CIRC for approval and submit the following documents in triplicate: (1) An dissolution application signed by the chairman of the board of directors of the company; (2) The decision of the assembly of shareholders of this company; (3) The composition of liquidation group and the liquidation program; and (4) The program for settling outstanding liabilities. Article 36. A joint equity or solely funded property insurance company, which is approved by the CIRC to be dissolved, shall stop engaging in any new business, return the license for engagement in the insurance business to the CIRC and form a liquidation group within 15 days. Article 37. The liquidation group shall, within 5 days after the establishment, give a written notice about the start of the liquidation procedures to the relevant administrative departments of industry and commerce, tax, and labor security, etc. Article 38. The liquidation group shall, within 1 month as of its formation, hire a accounting firm that meets the requirements of the CIRC to conduct audit, and shall submit a audit report to the CIRC within 3 months as of the day when it hires the auditing firm. Article 39. The liquidation group shall, prior to the 10th day of each month, report the latest information about the liquidation of debts and disposition of assets, etc. Article 40. The "newspapers" mentioned in Article 28 of the ARFFIC refers to the newspapers designated by the CIRC. Article 41. Where a foreign property insurance company applies for canceling a branch within the territory of China, it shall file an application to the CIRC for approval and submit the following materials: (1) An application signed by the chairman of the board of directors or the general manager of the foreign property insurance company; (2) The composition of the personnel of the liquidation group to be formed and a plan of liquidation; and (3) A plan for handling the unsettled liabilities. The procedures concerning the application for the dissolution of joint equity and foreign-funded property insurance companies of the ARFFIC as well as the present Detailed Rules shall apply to the withdrawal by foreign property insurance companies of their branches within the territory of China. Where the head office of the branches of foreign property insurance companies is dissolved, canceled according to law, or declared bankrupt, the liquidation of the branches and the handling of the debts thereof shall be done according to the relevant provisions of Article 30 of the ARFFIC and the present Detailed Rules regarding the dissolution of joint equity and sole funded property insurance companies. Article 42. Where a foreign-funded insurance company violates any of the relevant provisions in the present Detailed Rules, it shall be punished by the CIRC according to the Insurance Law, the ARFFIC and other laws and administrative regulations. Article 43. With regard to the materials and written reports required in the ARFFIC and the present Detailed Rules, if there is any discrepancy between the Chinese text and a text in foreign language, the Chinese text shall prevail. Article 44. The time limits mentioned in the ARFFIC and the present Detailed Rules shall be calculated from the date of service of the relevant materials. Where the application materials of an applicant are incomplete and it is necessary for the applicant to submit supplemental materials, the time limit shall be recalculated from the day when the supplemental materials of the applicant are served to the CIRC. The relevant approval or reporting periods mentioned in the present Detailed Rules refer to working days. Article 45. With regard to the administration on foreign-funded insurance companies, if it isn't provided for in the ARFFIC and the present Detailed Rules, then other laws and administrative regulations and the relevant provisions of the CIRC shall apply. The Regulation on the Establishment of Reinsurance Companies shall apply to the establishment of reinsurance companies. If there is any item not covered in the Regulation on the Establishment of Reinsurance Companies, the present Detailed Rules shall apply. Article 46. The Administrative Regulation of the People's Republic of China on Foreign-funded Insurance Companies and the present Detailed Rules shall apply by reference to the insurance companies established and operated within the Mainland of China by insurance companies from the Hong Kong and Macao Special Administrative Regions and from Taiwan. Where it is otherwise provided for by any law, administrative regulation or administrative agreement, the latter shall be followed. Article 47. The present Detailed Rules shall be implemented as of June 15, 2004. |
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