We use cookies to give you the best online experience. By using our website you agree to our use of cookies in accordance with our cookie policy. Learn more here.Close Me
On 26 March 2012, China Insurance Regulatory Commission
("CIRC") issued the Notice on Suspension of Market
Entry Approval of Regional Insurance Agencies and Certain Part-time
Insurance Agencies ("Notice").
Pursuant to the Notice, the CIRC and its local offices will
suspend granting new licences to full-time insurance agencies
operating on a regional basis ("Regional Insurance
Agencies") as well as to branch offices of existing
Regional Insurance Agencies. In addition, no new licences for
part-time insurance agency businesses will be granted unless the
respective applicant is a financial institution or a China Post
office.
The CIRC emphasised in the Notice that its local offices shall
continue to support the establishment of insurance intermediary
groups and full-time insurance agencies operating on a nationwide
basis, as well as continue to support their respective branch
offices.
Under the Provisions on Supervision of Full-time Insurance
Agencies (which came into force on 1 October 2009), the
paid-up capital threshold for a full-time insurance agency is RMB 2
million. However, the CIRC indicated that the majority of the
Regional Insurance Agencies in the market do not meet the above
mentioned minimum paid-up capital requirement. Most of the Regional
Insurance Agencies only engage in the auto insurance business. The
CIRC had previously required full-time insurance agencies
established prior to 1 October 2009 to increase their paid-up
capital to meet the minimum statutory requirement (i.e. RMB 2
million). If they failed to do so, their operational licences could
only be extended until 1 October 2012.
On the other hand, there are currently more than 190,000
part-time insurance agencies in China. Amongst those part-time
insurance agencies, more than 130,000 are local offices of banks
and the China Post Office. The other 50,000 part-time insurance
agencies are mainly involved in the auto insurance business.
It appears that the CIRC is aiming to increase the entry
thresholds of Regional Insurance Agencies and part-time insurance
agencies with a view to reducing the number, as well as, enhancing
the quality of insurance agencies in the market. Officials of the
CIRC indicated that the suspension of the approval is merely a
transitional measure and the CIRC intends to further amend the
Provisions on Supervision of Full-time Insurance Agencies
to set higher market entry requirements. It has also been indicated
that the CIRC may also consider removing Regional Insurance
Agencies as a type of insurance agency in the future.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The Australian Stock Exchange Listing Rules 3.1, 3.1A and 3.1B, and Guidance Note 8 concerning continuous disclosure obligations came into effect on 1 May 2013.
In a recent decision handed down by the High Court, Yau Tsz Hin v. Broadway Theatre Company Limited, HCPI 674 of 2010, the cinema successfully defended a 'slip and fall' claim lodged by its patron.
Employers licensed under the SRC Act should note that the State scheme may still operate and manage claims accordingly.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
