On 14 October 2015, the Legislative Affairs Office of the State Council of the PRC promulgated the draft Decision on Amending the PRC Insurance Law (Draft for Review and Approval) (Draft Amendments) on its official website inviting public comments. Feedback shall be provided before 14 November 2015.

Key aspects proposed to be amended

Improved regulatory supervision

  • Personal insurance business to be broadened to include annuities insurance, which would include enterprise annuity and occupational annuity;
  • Capital guarantee fund deposited by an insurance company to be reduced from 20% to 10% of the registered capital and to be capped at RMB200 million;
  • Limit on the retained premiums of a property insurance company to be removed (currently the retained premiums shall not exceed four times of the aggregate of a property insurance company's capital and reserve fund);
  • Scope of insurance fund utilisation to be extended to equity investment, insurance asset management products and for risk management purposes, financial derivatives;
  • Catastrophe insurance with financial support by the state to be formally legislated;
  • C-ROSS, the second generation of solvency supervision system, to be formally reflected in the PRC Insurance Law;
  • An insurance industry information sharing platform to be established and operated centrally at the state level.

Enhanced consumer protection

  • Statutory cooling off period of not less than 20 days to be set for personal insurance contracts of more than 1 year;
  • Divulgence, sale or illegal provision of personal information by insurance companies and insurance intermediaries to be expressly prohibited by law;
  • Administrative punishments to be introduced for product advertising or explanation which leads to misunderstanding or is untrue;
  • Administrative punishments to be imposed on an insurer's failure to pay claims within the statutory or otherwise agreed time frame;


  • CIRC's approval to be required for a change of the actual controller of a shareholder who has 5% or more share equity in an insurance company;
  • More interference from the CIRC if an insurance company is considered to be at significant risk;
  • Amount of penalty for acts in violation of law to be increased and the circumstances subject to penalties to be broadened;
  • Insurance protection fund to be used in case of significant risks in an insurance company;
  • Insurance adjuster to be defined.

This will be yet another overhaul of the PRC Insurance Law since 2009, in order to keep pace with the fast development of the Chinese insurance industry. It also echoes the State Council's requirements to remove unnecessary administrative approval and to enhance ongoing and ex-post oversight of the market as said by Li Keqiang, the Premier of China, on various occasions.

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