Circular of the China Insurance Regulatory Commission on Issuing the Interim Measures for the Administration of Non-insurance Subsidiaries Affiliated to Insurance Companies

Circular of the China Insurance Regulatory Commission on Issuing the Interim Measures for the Administration of Non-insurance Subsidiaries Affiliated to Insurance Companies

Bao Jian Fa [2014] No.78

September 28, 2014

All insurance group (holding) companies and insurance companies,

With a view to strengthening the supervision over and administration of the non-insurance subsidiaries affiliated to insurance companies, preventing risk transfer, protecting the interests of insurance consumers, and promoting the healthy development of the insurance industry, the China Insurance Regulatory Commission has formulated the Interim Measures for the Administration of Non-insurance Subsidiaries Affiliated to Insurance Companies, which are hereby issued to you for compliance and implementation.

Interim Measures for the Administration of Non-insurance Subsidiaries Affiliated to Insurance Companies

Chapter I General Provisions

Article 1 With a view to strengthening the supervision over and administration of the non-insurance subsidiaries affiliated to insurance companies, preventing risk transfer, protecting the interests of insurance consumers, and promoting the healthy development of the insurance industry, the Interim Measures for the Administration of Non-insurance Subsidiaries Affiliated to Insurance Companies (hereinafter referred to as the "Measures") are formulated pursuant to the Company Law of the People's Republic of China, the Insurance Law of the People's Republic of China, and other relevant laws, administrative regulations and regulatory provisions.

Article 2 For the purpose of the Measures, non-insurance subsidiaries affiliated to an insurance company refer to the domestic and overseas companies that are not insurance enterprises but are directly or indirectly controlled by the insurance company, excluding insurance companies, insurance assets management institutions, specialized insurance agencies, insurance brokerage institutions and insurance assessment institutions.
For the purpose of the Measures, insurance companies shall include insurance group (holding) companies.

Article 3 The non-insurance subsidiaries affiliated to an insurance company shall not engage in insurance business required to be run by insurance companies or other insurance organizations by the laws, administrative regulations and regulatory provisions.
Entities or individuals that intend to engage in insurance business shall apply to insurance regulatory authorities for verification and approval in accordance with the law, and obtain insurance business licensing.

Article 4 The China Insurance Regulatory Commission (hereinafter referred to as the "CIRC") shall, in accordance with the laws, administrative regulations, regulatory provisions and the Measures, conduct supervision and administration over the investment in and the management of non-insurance subsidiaries by insurance companies.
The CIRC shall adopt an indirect regulatory approach, and take regulatory measures via insurance companies in accordance with the law, to comprehensively monitor the risks of the non-insurance subsidiaries affiliated to insurance companies.

Article 5 Where the non-insurance subsidiaries affiliated to an insurance company are listed companies or are also governed by other industry regulatory authorities, they shall also be subject to the relevant laws and regulations on securities regulation or the regulatory requirements of other industries concerned.

Article 6 The CIRC shall, via the inter-ministerial joint conference for financial regulatory coordination, and the cooperation mechanisms set up with the People's Bank of China, the China Banking Regulatory Commission and the China Securities Regulatory Commission, actively exchange information with the industry regulatory authorities corresponding to the non-insurance subsidiaries affiliated to insurance companies so as to enhance regulatory coordination and cooperation, and avoid regulatory vacuum or overlapping.

Chapter II Code of Conduct

Section 1 Investment

Article 7 With a view to better integrating resources, giving play to synergies, improving the level of specialization, and promoting the development of its core insurance business, an insurance company may directly or indirectly invest in the establishment of non-insurance subsidiaries whose specific types shall include:
1. non-insurance financial subsidiaries that engage in financial services other than insurance business in accordance with the law;
2. shared services subsidiaries that mainly provide the insurance company or its subsidiaries with IT, audit, insurance policy management, property management and other services or management;
3. investment platform companies with a strong correlation with insurance business, project companies established for the purpose of managing the investment of insurance funds in real estate, and subsidiaries engaging in affiliated industries that are formed via the investment of insurance funds in the equities of energy or resources enterprises and the equities of enterprises related to insurance business, such as those of elderly care, medical care, automobile services, modern agriculture, and new-type commerce and trade circulation; and
4.
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