The Regulation of Insurance in China

With the rapid development of China’s insurance industry and the opening of the Chinese insurance market to the world, Chinese insurance law and regulation has become an increasingly relevant topic for insurance practitioners and academics. The Regulation of Insurance in China therefore provides a much needed analysis of the Chinese regulatory system. This is the first systematic text written in English on the regulation of insurance in China and provides a comprehensive and systematic analysis of rules of law and administrative regulations on China’s insurance industry and insurance market, covering four level of regulatory hierarchy - the statutory law, the regulations enacted by the central government (the State Council), the regulations developed by the insurance supervision and regulation authority of the State Council, and self-regulations by the insurance industry. This book is essential reading for insurance companies and legal practitioners looking to do business in China, as well as reference for lawyers practising insurance law. It is also a useful resource for students and academics studying Chinese law.

CHAPTER 1 Introduction of Insurance Regulation and Insurance Industry 1.1 Introduction 1.2 The nature of insurance 1.3 Reasons and objectives of insurance regulation 1.4 The outline of this book 1.5 The development of China’s insurance industry 1.6 The present insurance market in China 1.7 The further development of the insurance industry 1.8 Conclusion CHAPTER 2 Chinese Legal System and the Insurance Legislation 2.1 Introduction 2.2 Philosophical traditions of Chinese law 2.3 The legislative system 2.4 The judicial system 2.5 Insurance legislation in China 2.6 Administrative regulations by the State Council The judicial interpretations of statutory law by the SPC Regulations enacted by the insurance supervision and regulation authority of the State Council and other relevant regulatory authorities Self-regulation rules 2.10 The regulatory framework of insurance in China 2.11 Conclusion CHAPTER 3 Insurance Supervision and Regulation Authority and System 3.1 Introduction 3.2 A historical consideration of the development of insurance regulatory authority 3.3 Statutory functions and responsibilities of the insurance supervision and regulation authority of the State Council 3.4 The China Banking and Insurance Regulatory Commission 3.5 The functions and responsibilities of local offices of the CBIRC 3.6 The new duty of the local offices of the CBIRC to implement certain administrative licensing matters 3.7 The allocation of responsibilities between the CBIRC and its local offices for the supervision and regulation of property insurance companies and reinsurance companies 3.8 Methods of insurance supervision and regulation 3.9 Corrective measures and administrative penalties 3.10 Conclusion CHAPTER 4 Formation and Dissolution of Insurance Companies 4.1 Introduction 4.2 Formation of insurance companies 4.3 Formation of branch offices 4.4 Formation of overseas insurance institutions 4.5 Formation of reinsurance companies 4.6 Formation and business scope of insurance group companies Regulation on modification, dissolution and abolition of insurance institutions Market access and withdrawal of non-insurance subsidiaries of insurance companies 4.9 Supervision and administration of insurance institutions 4.10 Supervision and administration of insurance group companies 4.11 Conclusion CHAPTER 5 Regulation of Foreign-Funded Insurance Companies and the Representative Offices of Foreign Insurance Institutions 5.1 Introduction 5.2 Regulation on the administration of foreign-funded insurance companies 5.3 The Implementation Rules for the RAFFIC 5.4 Administration of representative offices of foreign insurance institutions in China 5.5 Conclusion CHAPTER 6 Regulation of Administrative Licencing and Insurance Permits 6.1 Introduction 6.2 The principles of insurance licensing 6.3 Administrative licensing and insurance permits 6.4 The Provisions on Implementation Procedures of Administrative Licensing 6.5 Regulation of insurance permits 6.6 Conclusion CHAPTER 7 Regulation of Corporate Governance 7.1 Introduction 7.2 The legal framework for corporate governance of insurance companies 7.3 Statutory requirements for directors, supervisors and senior officers of insurance companies 7.4 Requirements for directors, supervisors and senior officers formulated by the CBIRC The regulation of corporate governance structure 7.6 Regulation of the operation of the board of directors of insurance companies 7.7 Administration of auditing of directors and senior managers of insurance companies Internal audit of insurance companies 7.9 Guidelines for salary management rules of insurance companies 7.10 Compliance management of insurance companies 7.11 Related-party transactions of insurance companies 7.12 Risk management of insurance companies 7.13 Comprehensive risk management of personal insurance companies 7.14 Internal control of insurance companies 7.15 Evaluation of insurance company corporate governance 7.16 Corporate governance of insurance group companies and of insurance groups 7.17 Information disclosure by insurance companies 7.18 Corporate governance action plan for three years from 2020 to 2022 7.19 Conclusion CHAPTER 8 Regulation of Equites of Insurance Companies 8.1 Introduction 8.2 Classification of equites of insurance companies 8.3 Qualifications of shareholders 8.4 Acquisition of equities 8.5 Funds for acquiring equities 8.6 Behaviours of shareholders 8.7 Management of equity matters 8.8 Submission of materials to the CBIRC 8.9 Supervision and administration 8.10 Equity information disclosure by insurance companies 8.11 Conclusion CHAPTER 9 Regulation of Insurance Business 9.1 Introduction 9.2 An overview of law and regulations for insurance business 9.3 The regulation on scope of insurance business 9.4 Statutory and regulatory requirements for insurance clauses and premium rates 9.5 Regulation of insurance clauses and premium rates of property insurance 9.6 Regulation of insurance clauses and premium rates of commercial motor vehicle insurance 9.7 Regulation of insurance clauses and premium rates of personal insurance 9.8 Development of insurance products by property insurance companies 9.9 Improving the product supervision of property insurance companies 9.10 Strengthening the supervision of personal insurance products 9.11 Regulation of product development and design of personal insurance companies 9.12 Regulation of information disclosure of insurance products 9.13 Premium rate adjustment and information disclosure of long-term medical insurance products 9.14 Regulation of actuaries 9.15 Regulation of reinsurance business 9.16 Conclusion CHAPTER 10 Regulation of Conduct of Insurance Companies 10.1 Introduction 10.2 Legal framework for the regulation of the conduct of insurers 10.3 Regulation of the conduct of insurance business 10.4 Regulation on conduct of insurers in advertising or selling insurance products 10.5 Prohibition of misconducts of insurers and their employees 10.6 Guidelines for the determination of misleading sales of personal insurance 10.7 Guiding opinions on liability for misleading sales of personal insurance 10.8 The basic services of the personal insurance business 10.9 Telephone sales of insurance products 10.10 Retrospective administration of insurance sales practices 10.11 Electronic return visit of life insurance 10.12 Regulation of the conduct of insurance claims 10.13 Evaluation of the service of insurance companies 10.14 Evaluation of the business operation of insurance companies 10.15 Conclusion CHAPTER 11 Regulation of Solvency 11.1 Introduction 11.2 The legal framework of regulation of solvency 11.3 The first generation of solvency regulation system 11.4 The conceptual framework of the second generation of solvency regulation system 11.5 The documentary framework of C-ROSS 11.6 The impact of the C-ROSS 11.7 The second phase of the construction of the C-ROSS 11.8 Capital guarantee funds 11.9 The management of reserves for non-life insurance businesses of insurance companies 11.10 Conclusion CHAPTER 12 Regulation of the Use of Insurance Funds 12.1 Introduction 12.2 The current state of insurance funds utilization 12.3 Regulatory principles for insurance funds utilization 12.4 An overview of the regulatory framework regarding the use of insurance funds 12.5 Channels for the use of insurance funds 12.6 Insurance funds in bank deposits 12.7 Insurance funds investment in bonds 12.8 Insurance funds investment in stocks 12.9 Investment of insurance funds in real estate 12.10 Indirect investment of insurance funds in infrastructure projects 12.11 Insurance funds investment in equities 12.12 Investing insurance funds in infrastructure debt investment plans 12.13 Insurance funds investment in collective trust funds 12.14 Investment of insurance funds in venture capital funds 12.15 The proportional regulation of the utilization of insurance funds 12.16 Modes of insurance funds utilization 12.17 Entrusted investment of insurance funds 12.18 R

Professor Zhen Jing is Chair in Commercial Law at the School of Law, Bangor University. She has taught insurance law formany years and has practical experience in the Chinese insurance industry. She is author of Chinese Insurance Contracts: Law and Practice whichwas awarded the 2017 British Insurance Law AssociationBook Prize.