Circular of the China Insurance Regulatory Committee on Issues Related to Formal Implementation of Chinese Risk-Oriented Solvency System
Circular of the China Insurance Regulatory Committee on Issues Related to Formal Implementation of Chinese Risk-Oriented Solvency System
Circular of the China Insurance Regulatory Committee on Issues Related to Formal Implementation of Chinese Risk-Oriented Solvency System
Bao Jian Fa [2016] No. 10
January 25, 2016
All insurance group (holding) companies, insurance companies, insurance asset management companies and all bureaus of the China Insurance Regulatory Commission,
Along with the promulgation of Chinese Risk-oriented Solvency System (hereinafter abbreviated as the "Second Generation Solvency System") by the China Insurance Regulatory Committee (hereinafter referred to as the "CIRC") in February, 2015, Chinese insurance industry has entered the transition period of second generation solvency regulation system. According to the trial operations in the interim, CIRC, upon the approval of the State Council, has decided to formally implement the Second Generation Solvency System and adopt the Solvency Regulatory Rules for Insurance Companies (No.1-17) as of January 1, 2016. Relevant issues are hereby notified as follows,
I. Requirements on the Implementation of the Seventeen Regulatory Rules for the Second Generation Solvency System
1. Quantitative Capital Requirements
Insurance companies shall evaluate the actual capital and minimum capital, work out the core solvency adequacy ratio and comprehensive solvency adequacy ratio and carry out stress tests in accordance with the regulatory rules No. 1 to No. 9 for the Second Generation Solvency System.
(1) Standards on the recognition and measurement of income tax provisions indicated in Article 22 of the Regulatory Rules on the Solvency of Insurance Companies No. 1: Actual Capital are clarified as follows,
An insurance company that has positive taxable income for any three consecutive years since its establishment shall be recognized for its income tax provisions. Recognition of such income tax provisions cannot be terminated unless sufficient evidence is available to demonstrate that the tendency of the continuously positive taxable income will be fundamentally reversed in the long term.
The recognized value of income tax provisions shall be 10% of the residual margin of the life insurance contract liabilities in the financial statements.
(2) Specific parameters for the discount rate curve used for the measurement of life insurance liabilities indicated in Article 19 of the Regulatory Rules on the Solvency of Insurance Companies No. 3: Evaluation of Life Insurance Contract Liabilities, are provided in Appendix I.
(3) The scenario loss factor table and the minimum capital calculation templates used by insurance companies for working out the minimum capital for catastrophe risks indicated in Chapter V of the Regulatory Rules on the Solvency of Insurance Companies No.
......
Bao Jian Fa [2016] No. 10
January 25, 2016
All insurance group (holding) companies, insurance companies, insurance asset management companies and all bureaus of the China Insurance Regulatory Commission,
Along with the promulgation of Chinese Risk-oriented Solvency System (hereinafter abbreviated as the "Second Generation Solvency System") by the China Insurance Regulatory Committee (hereinafter referred to as the "CIRC") in February, 2015, Chinese insurance industry has entered the transition period of second generation solvency regulation system. According to the trial operations in the interim, CIRC, upon the approval of the State Council, has decided to formally implement the Second Generation Solvency System and adopt the Solvency Regulatory Rules for Insurance Companies (No.1-17) as of January 1, 2016. Relevant issues are hereby notified as follows,
I. Requirements on the Implementation of the Seventeen Regulatory Rules for the Second Generation Solvency System
1. Quantitative Capital Requirements
Insurance companies shall evaluate the actual capital and minimum capital, work out the core solvency adequacy ratio and comprehensive solvency adequacy ratio and carry out stress tests in accordance with the regulatory rules No. 1 to No. 9 for the Second Generation Solvency System.
(1) Standards on the recognition and measurement of income tax provisions indicated in Article 22 of the Regulatory Rules on the Solvency of Insurance Companies No. 1: Actual Capital are clarified as follows,
An insurance company that has positive taxable income for any three consecutive years since its establishment shall be recognized for its income tax provisions. Recognition of such income tax provisions cannot be terminated unless sufficient evidence is available to demonstrate that the tendency of the continuously positive taxable income will be fundamentally reversed in the long term.
The recognized value of income tax provisions shall be 10% of the residual margin of the life insurance contract liabilities in the financial statements.
(2) Specific parameters for the discount rate curve used for the measurement of life insurance liabilities indicated in Article 19 of the Regulatory Rules on the Solvency of Insurance Companies No. 3: Evaluation of Life Insurance Contract Liabilities, are provided in Appendix I.
(3) The scenario loss factor table and the minimum capital calculation templates used by insurance companies for working out the minimum capital for catastrophe risks indicated in Chapter V of the Regulatory Rules on the Solvency of Insurance Companies No.
......