Last Sunday during a press conference held during the National
People's Congress, China Insurance Regulatory Commission
(CIRC) Chairman Wu Dingfu announced that the CIRC
is currently creating its policy for the use of insurance premium
funds to invest government subsidized affordable housing projects.
He specifically stated that China does not have a legal barrier to
insurance companies investing insurance funds in affordable housing
projects, and he also said that the CIRC plans making Shanghai the
first city where this is possible. However, he cautioned that the
main priority in insurance fund investment must still be risk
management because any investments must provide a return so that an
insurance company's duty to pay its policyholders claims can be
The new version of the Insurance Law that came into force
October 2009 made it clear that insurance companies would have more
investment channels are open for insurance funds, specifically, the
2009 Insurance Law stated that investing insurance funds in real
estate was acceptable. In September 2010, the CIRC promulgated the
Provisional Measures for Insurance Capital Investment in Real
Estate. This regulation provides the basic outline of what the
types of real estate projects that insurance companies can invest
in. Although this regulation is in place, it appears that the CIRC
is not ready to approve insurance companies investing real estate
projects, but announcement can probably be taken as evidence that
CIRC is moving closer to being ready to approve insurance companies
investing in real estate projects. Also based on Chairman Wu's
statements it probably can be assumed that the first real estate
project that insurance company investing will be located in
Shanghai, and it most likely be a housing project that is
subsidized to keep its prices affordable.
If you have any questions about the potential for insurance
funds to be invested in real estate development projects, or if you
would like more details on the Provisional Measure for Insurance
Capital Investment in Real Estate please contact us.
The failure of a party to call a witness does not necessarily give rise to an adverse inference being drawn in accordance with Jones v Dunkel (1959) 101 CLR 298. An unfavourable inference is drawn only if evidence otherwise provides a basis on which that unfavourable inference can be drawn.
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