On 26 June 2012, China Insurance Regulatory Commission
("CIRC") released the Notice on Further Regulation of
Market Entry of Insurance Intermediaries
The CIRC states in the Notice that no new licence for insurance
intermediaries will be granted unless the applicant applies to
establish the following insurance intermediaries:
insurance intermediary group
insurance agency/broker with a registered capital of RMB50
million or above which are invested by car manufacture/sales/repair
enterprises, banks, China Post offices or insurance companies, and
branch offices of the aforesaid insurance agency/broker, and
branch offices of an existing insurance agency operating on a
This is the second circular issued by the CIRC this year in
relation to regulation of market entry into the insurance
intermediary market. Back in March 2012, the CIRC suspended
granting new licences to full-time insurance agencies, and their
branch offices, operating on a regional basis. The licence for
part-time insurance agency business has also said only to be
granted to financial institutions and China Post offices.
Under Chinese law, there are three types of insurance
intermediaries: insurance agencies, insurance brokers and insurance
loss adjusters. With issuance of the two circulars by the CIRC this
year, it is apparent that no new licence for insurance loss
adjusters will be granted as well. To establish an insurance
agency/ broker, the minimum threshold requirement on paid-up
capital has been considerably increased to RMB50 million. The
minimum paid-up capital previously required under the CIRC's
regulation was RMB two million for insurance agencies and loss
adjusters and RMB 10 million for insurance brokers.
The Notice nevertheless clearly indicates that for those
applications which had already been accepted by the CIRC prior to
the issuance of the Notice, they will not be affected and will be
handled according to the existing rules and procedures.
It is clear that the CIRC continues to encourage establishment
of insurance intermediary groups as well as insurance
agencies/brokers with strong financial capacity. The CIRC aims to
transform the Chinese insurance intermediary market and the
Provisions on Supervision of Full-time Insurance Agencies,
the Provisions on Supervision of Insurance Brokers and the
Provisions on Supervision of Insurance Loss Adjustors will
be further amended.
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.
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”