Circular of the China Insurance Regulatory Commission on Strengthening Insurance Regulation, Clamping down on Illegalities and Violations and Reining in the Chaotic Market
Circular of the China Insurance Regulatory Commission on Strengthening Insurance Regulation, Clamping down on Illegalities and Violations and Reining in the Chaotic Market
Circular of the China Insurance Regulatory Commission on Strengthening Insurance Regulation, Clamping down on Illegalities and Violations and Reining in the Chaotic Market
Bao Jian Fa [2017] No.40
April 28, 2017
To deeply implement the spirits of the Central Economic Working Conference, specially of the important instructions of General Secretary Xi Jinping and Prime Minister Li Keqiang on financial work, to severely clamp down illegalities and violations, and to regulate the chaotic insurance market, the China Insurance Regulatory Commission (the "CIRC") will organize and carry out centralized rectification measures in the near future. The relevant matters are hereby notified as follows:
I. Purpose and Significance
Since the 18th National Congress of the Communist Party of China, under the correct leadership of the Party Central Committee and the State Council, the insurance industry has achieved sustained and rapid growth, with increasingly improved guarantee capacity and constantly enhanced ability to serve the real economy. However, as some market players have impure motives, seek quick success and instant benefits, seek to be fast and perfect, and some regulators fail to place themselves into a correct position, bear insufficient responsibilities and perform inadequate duties, the insurance industry is also experiencing financial market chaos, centralized reflections of which include insufficient capital, ineffective governance, uncontrollable investment, dishonest marketing, and inauthentic data on the part of some insurance institutions. These chaos have seriously damaged the legitimate rights and interests of insurance consumers, and disturbed the order of the insurance market, and may even lead to major economic and financial risks. In the face of these market chaos, the CIRC will adhere to the principle of "no dodge and no concealing", perform its responsibilities and duties with a stronger spirit of play, strictly carry out remediation, timely handle problems and execute strict accountability, and absolutely hold the bottom line of avoidance of general market risk to ensure the national economic and financial security and stability.
II. Work Deployment
1. Focus on the punishment of false capital contribution and effectively resolve the problem of insufficient capital.
Centralized punishments will be untaken against shareholders of insurance companies that make use of insurance funds to inject capital to themselves make cyclic use of such funds; that evade supervision by increasing equity hierarchy, use non-proprietary funds for capital contribution; that do not contribute true and adequate capital or that withdraw capital.
All insurance institutions shall carefully inspect the source of contributed capital to ensure contributed capital is authentic, self-owned and lawful. If they provide false information or deliberately conceal any fact, they are willing to be punished by regulatory departments.
Regulatory departments shall carry out special rectification on capital authenticity and pay close attention to whether shareholders invest in an insurance company directly or indirectly via the following ways: bank loans and other forms of debt funds; trust funds, entrusted funds and other non-proprietary funds; the funds relevant to the use of an investment trust plan of insurance companies and other financial products; funds acquired from the pledge of deposits of insurance companies; funds acquired from the pledge of equities of insurance companies. For shareholders that make false declaration of contributed capital source or shareholders' related relationship, prepare and provide false materials or have other violations, once these violations are found, regulatory departments shall take such supervision measures in accordance with the law such as restricting their exercise of voting rights, right to dispatch directors or other shareholders' rights, even ordering them to transfer or auction equities, and shall include the relevant parties concerned in the blacklist of the insurance industry to restrict them from carrying out investment activities in the insurance industry.
2.
......
Bao Jian Fa [2017] No.40
April 28, 2017
To deeply implement the spirits of the Central Economic Working Conference, specially of the important instructions of General Secretary Xi Jinping and Prime Minister Li Keqiang on financial work, to severely clamp down illegalities and violations, and to regulate the chaotic insurance market, the China Insurance Regulatory Commission (the "CIRC") will organize and carry out centralized rectification measures in the near future. The relevant matters are hereby notified as follows:
I. Purpose and Significance
Since the 18th National Congress of the Communist Party of China, under the correct leadership of the Party Central Committee and the State Council, the insurance industry has achieved sustained and rapid growth, with increasingly improved guarantee capacity and constantly enhanced ability to serve the real economy. However, as some market players have impure motives, seek quick success and instant benefits, seek to be fast and perfect, and some regulators fail to place themselves into a correct position, bear insufficient responsibilities and perform inadequate duties, the insurance industry is also experiencing financial market chaos, centralized reflections of which include insufficient capital, ineffective governance, uncontrollable investment, dishonest marketing, and inauthentic data on the part of some insurance institutions. These chaos have seriously damaged the legitimate rights and interests of insurance consumers, and disturbed the order of the insurance market, and may even lead to major economic and financial risks. In the face of these market chaos, the CIRC will adhere to the principle of "no dodge and no concealing", perform its responsibilities and duties with a stronger spirit of play, strictly carry out remediation, timely handle problems and execute strict accountability, and absolutely hold the bottom line of avoidance of general market risk to ensure the national economic and financial security and stability.
II. Work Deployment
1. Focus on the punishment of false capital contribution and effectively resolve the problem of insufficient capital.
Centralized punishments will be untaken against shareholders of insurance companies that make use of insurance funds to inject capital to themselves make cyclic use of such funds; that evade supervision by increasing equity hierarchy, use non-proprietary funds for capital contribution; that do not contribute true and adequate capital or that withdraw capital.
All insurance institutions shall carefully inspect the source of contributed capital to ensure contributed capital is authentic, self-owned and lawful. If they provide false information or deliberately conceal any fact, they are willing to be punished by regulatory departments.
Regulatory departments shall carry out special rectification on capital authenticity and pay close attention to whether shareholders invest in an insurance company directly or indirectly via the following ways: bank loans and other forms of debt funds; trust funds, entrusted funds and other non-proprietary funds; the funds relevant to the use of an investment trust plan of insurance companies and other financial products; funds acquired from the pledge of deposits of insurance companies; funds acquired from the pledge of equities of insurance companies. For shareholders that make false declaration of contributed capital source or shareholders' related relationship, prepare and provide false materials or have other violations, once these violations are found, regulatory departments shall take such supervision measures in accordance with the law such as restricting their exercise of voting rights, right to dispatch directors or other shareholders' rights, even ordering them to transfer or auction equities, and shall include the relevant parties concerned in the blacklist of the insurance industry to restrict them from carrying out investment activities in the insurance industry.
2.
......