Circular on Printing and Distributing the Guiding Opinions on Investigating Responsibilities for Cases Involving insurance institutions

Circular on Printing and Distributing the Guiding Opinions on Investigating Responsibilities for Cases Involving insurance institutions

Bao Jian Fa [2010] No. 12

January 29, 2010

Bureaus of the China Insurance Regulatory Commission of all regions, all insurance group companies, insurance companies, insurance asset management companies, and insurance intermediary companies,

For the purpose of further enhancing risk prevention awareness in cases involving insurance institutions, standardizing responsibilities investigation, and effectively curbing various types of cases involving insurance companies and material breaches of laws and regulations, the Guiding Opinions on Investigating Responsibilities for Cases Involving insurance institutions, formulated by this Commission, are hereby printed and circulated and shall come into effect as of July 1, 2010, in replacement of The Tentative Measures for Investigation Responsibilities of the Leadership of State-owned Insurance Institutions in Material Cases (Bao Jian Fa (2006) No 11) promulgated by this Commission in January 2006.

Guiding Opinions on Investigating Responsibilities for Cases Involving insurance institutions

Article 1 The Guiding Opinions on Investigating Responsibilities for Cases Involving insurance institutions (hereinafter, "the Guiding Opinions") are formulated in accordance with laws and regulations, including the Insurance Law of the People's Republic of China, for the purpose of further enhancing risk prevention awareness in cases involving insurance institutions, standardizing responsibilities investigation for cases, and effectively curbing various types of cases involving insurance institutions and material breaches of laws and regulations.

Article 2 For the purpose of these Guiding Opinions, insurance institutions shall refer to insurance group (holding) companies, insurance companies, insurance asset management institutions and the branches thereof established with the approval of the China Insurance Regulatory Commission (hereinafter, "CIRC") or a local resident agency thereof (hereinafter referred to as a "local resident agency").

Article 3 The cases referred to in these Guiding Opinions shall include the following:
1. Cases involving any violation of the Criminal Law of the People's Republic of China which constitutes any of the following criminal offenses: graft, misappropriation, encroachment, commercial bribery, illegal fund raising, money laundering or pyramid selling, for which the competent people's court has issued effective ruling, or the matters of facts and actual damages concerning which are ascertained, although the competent people's court has yet to render a judgment;
2. Cases involving violation of applicable laws, regulations or rules, including the Insurance Law of the People's Republic of China for which material administrative penalties are imposed by financial regulatory departments such as the insurance regulatory department; and
3. Other cases involving any material violation of the rules and regulations of the insurance company resulting in significant loss to the company or causing exceptionally adverse impact on society and systematic risks.

Article 4 For the purpose of these Guiding Opinions, the persons responsible for a case shall refer to insurance institution staff members who bear the responsibility for occurrence of a case, including both those who are directly responsible and those indirectly responsible.
Persons directly responsible shall refer to the officer(s) in charge who bears direct responsibility for the case and other persons directly responsible for the case, that is, insurance institution staff members who make decisions to, organize, plan, implement or participate in the implementation of any criminal offense in the case, or staff members of the insurance institution who arrange, instigate, connive at, or assist the commitment of such criminal offense, as well as those who, owing to non-performance or incorrect performance of duties, directly brought about risks or triggered an adverse outcome to the case.
Persons indirectly responsible shall refer to insurance institution staff members, including the primary person(s) in charge of operations and other persons indirectly responsible, who, to the extent of their duties, fail to perform their duties, or incorrectly perform such duties, and therefore fail to effectively curb or prevent the case from occurring, as well as those who indirectly bring about risks or an adverse outcome to the case.
The primary person(s) in charge of operations stated in the previous clause shall refer to the senior management and department heads with operational and management responsibilities in the institution where the case occurs. The other persons indirectly responsible stated in the previous clause shall refer to other senior management and department heads such as directors, supervisors, and qualified persons in charge, who, to the extent of their respective duties, fail to perform at all or incorrectly perform their duties of curbing, management and supervision on purpose, due to negligence or failure to perform their duties, bringing about risks or adverse outcome of the case.
The insurance institution staff members referred to in these Guiding Opinions shall include employees of insurance institutions, and insurance salespeople and others who are agents of the business thereof.

Article 5 The investigation of responsibilities for cases involving insurance institutions shall comply with the principles of "clear facts, irrefutable evidence, clear responsibility, legal procedures, correspondence between power and responsibility, level-upon-level investigation, fairness and justice, and combining punishment with rehabilitation". The investigation shall be conducted in accordance with such circumstances as the nature of the case under investigation, the amount of money involved, losses from risks, and the degree of social impact and on the basis of proper verification of the responsibilities of the offenders.

Article 6 These Guiding Opinions shall be the minimum standard set for investigating responsibilities for cases involving insurance institutions. Every insurance institution shall, on the basis of these Guiding Opinions and its actual conditions, formulate internal measures for investigating responsibilities for cases, standardize the investigation of responsibilities for cases in terms of the scope, target, standards, and procedures, as well as provide for the handling of situations such as that as regards responsibilities that shall be investigated but where the investigation fail to be conducted at all or fail to be conducted effectively.

Article 7 An insurance institution shall, in accordance with its internal measures, investigate the responsibilities for cases involving the insurance institution; the department in charge of such investigation shall, in accordance with its internal administrative route, issue decisions on the responsibilities investigation by the responsibilities investigating institution.

Article 8 The methods issued by an insurance institution for the investigation of responsibilities for cases involving the institution shall include: disciplinary sanctions, organizational sanctions, and economic penalties.
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