Provisions on the Regulation of Insurance Agents
Provisions on the Regulation of Insurance Agents
Provisions on the Regulation of Insurance Agents
Order of the China Banking and Insurance Regulatory Commission [2020] No. 11
November 12, 2020
The Provisions on the Regulation of Insurance Agents, which were adopted at the 13th commission meeting of 2019 of the China Banking and Insurance Regulatory Commission on December 19, 2019, are hereby promulgated and shall come into effect as of January 1, 2021.
Guo Shuqing, Chairman
Provisions on the Regulation of Insurance Agents
Chapter I General Provisions
Article 1 These Provisions are formulated in accordance with the Insurance Law of the People's Republic of China (hereinafter referred to as the "Insurance Law") as well as other laws and administrative regulations with a view to regulating the business conduct of insurance agents, and protecting the legitimate rights and interests of insurance applicants, the insured and beneficiaries while maintaining market order.
Article 2 For the purpose of these Provisions, "insurance agent" refers to an institution or individual, including professional insurance agency, concurrent-business insurance agency and individual insurance agent, who, under the entrustment by an insurance company, collects corresponding commission therefrom, and, within the scope of authorization thereby, handles insurance business on behalf of the insurance company.
For the purpose of these Provisions, "professional insurance agency" refers to an insurance agency company along with its branches legally established and specialized in insurance agency business.
For the purpose of these Provisions, "concurrent-business insurance agency" refers to an enterprise, including concurrent-business insurance agency corporation and the branches thereof, which takes advantage of the convenience in the relevance between its principal business and insurance to legally engage in insurance agency business in a concurrent manner.
For the purpose of these Provisions, "individual insurance agent" refers to a person who concludes a principal-agent contract with an insurance company and engages in insurance agency business.
For the purpose of these Provisions, "insurance agency practitioner" refers to a person who engages in sales of insurance products or relevant business such as loss investigation, claims settlement in a professional insurance agency or concurrent-business insurance agency.
Article 3 A professional insurance agency company or a concurrent-business insurance agency corporation engaging in insurance agency business within the territory of the People's Republic of China shall meet the conditions prescribed by the insurance regulator under the State Council and obtain the relevant permit for engaging in insurance agency business (hereinafter referred to as "permit").
Article 4 Each insurance agent shall abide by laws, administrative regulations and relevant provisions of the insurance regulator under the State Council, and follow the principles of voluntariness, good faith and fair competition.
Article 5 The insurance regulator under the State Council shall, in accordance with the Insurance Law and under the authorization of the State Council, perform the duty of the regulation of insurance agents.
Local offices of the insurance regulator under the State Council shall perform their regulatory duties within the scope of authorization granted by the insurance regulator under the State Council.
Chapter II Market Access
Section 1 Business Permission
Article 6 Except as otherwise prescribed by the insurance regulator under the State Council, a professional insurance agency company shall adopt either of the following forms of organization:
1. limited liability company; or
2. company limited by shares.
Article 7 A professional insurance agency company engaging in insurance agency business shall meet the following conditions:
1. its shareholders meet the requirements hereof and make capital contribution with self-owned, authentic and legitimate funds, rather than bank loans or various non-self-owned funds for investment;
2. its registered capital meets the requirements of Article 10 hereof while being held in escrow in accordance with relevant provisions of the insurance regulator under the State Council;
3. the business scope set forth in its business license complies with relevant provisions;
4. its articles of association comply with relevant provisions;
5. its company name meets the requirements hereof;
6. its senior executives meet the post-holding qualifications required herein;
7. it has a governance structure and an internal control system required by the insurance regulator under the State Council, along with a scientific, reasonable and feasible business model;
8. it has a fixed domicile commensurate with its business size;
9. it has business and financial information management systems required by the insurance regulator under the State Council; and
10. it meets other conditions prescribed by laws, administrative regulations and the insurance regulator under the State Council.
Article 8 No entity or individual falling under any of the following circumstances may become a shareholder of a professional insurance agency company:
1. it has been subjected to a criminal penalty or major administrative punishment in the last five years;
2. it is under investigation by the relevant department due to being suspected of committing any major illegal or criminal offense;
3. it is determined as a target of joint disciplinary action against dishonesty by the relevant authority of the State due to serious dishonesty and shall be subjected to corresponding disciplinary action in the field of insurance, or it has any other bad record of serious dishonesty in the last five years;
4. it is not allowed to invest in any enterprise in accordance with laws or administrative regulations; or
5. it falls under any other circumstance that makes it unsuitable for being a shareholder of a professional insurance agency company as identified by the insurance regulator under the State Council as per the principle of prudential regulation.
Article 9 No insurance company work personnel, individual insurance agent or professional insurance intermediary practitioner may invest in a professional insurance agency company separately; and close relatives of directors, supervisors and senior executives of each insurance company or professional insurance intermediary shall, when engaging in insurance agency business, comply with relevant provisions on withdrawal for duty performance.
Article 10 The minimum registered capital of a professional insurance agency company whose business area is not limited to the province, autonomous region, municipality directly under the Central Government or city specifically designated in the state plan where its place of registration is located shall be CNY50 million.
The minimum registered capital of a professional insurance agency company whose business area is the province, autonomous region, municipality directly under the Central Government or city specifically designated in the state plan where its place of registration is located shall be CNY20 million.
The registered capital of a professional insurance agency company must be paid-in monetary capital.
Article 11 The name of a professional insurance agency company shall contain the words "insurance agency".
The trade name of a professional insurance agency company shall not be the same as that of any existing professional insurance intermediary, except for those whose actual controller is the same as that of any other professional insurance intermediary.
A professional insurance agency company shall use an abbreviation of its name in a standardized manner, clearly indicate the industry segment to which it belongs, without confusing the concepts of insurance agency company and insurance company, and definitely indicate the words "insurance agency" in its publicity.
Article 12 A concurrent-business insurance agency engaging in insurance agency business shall meet the following conditions:
1. it has a business license issued by the competent administration for market regulation, and has obtained the business permission from the relevant department if its principal business is legally subject to approval;
2. its principal business is in good condition with no record of major administrative punishment in the last two years;
3. it has a source of insurance agency business related to its principal business;
4. it has business premises or sales channels for convenient services;
5. it has the necessary hardware and software facilities with its insurance business information system connected with insurance companies, and its business and financial data can be independent of its principal business for separate queries to be made and statistics compiled;
6. it has a sound insurance agency business management system and mechanism;
7. it has insurance agency business responsible personnel who meet the conditions hereof; and
8. it meets other conditions prescribed by laws, administrative regulations and the insurance regulator under the State Council.
No concurrent-business insurance agency which is determined as a target of joint disciplinary action against dishonesty by the relevant authority of the State due to serious dishonesty and shall be subjected to corresponding disciplinary action in the field of insurance, or has any other bad record of serious dishonesty in the last five years may engage in insurance agency business.
Article 13 A concurrent-business insurance agency corporation and its branches designated under Article 20 hereof shall respectively appoint their principals in charge of insurance business to be the insurance agency business responsible personnel.
Insurance agency business responsible personnel shall behave well, be familiar with insurance laws and administrative regulations, and have the operation and management capacity required to perform their duties.
Article 14 A professional insurance agency company applying to engage in insurance agency business shall, after obtaining its business license, promptly submit application materials and disclose the relevant information as required by the insurance regulator under the State Council.
A concurrent-business insurance agency corporation applying to engage in insurance agency business shall promptly submit application materials and disclose the relevant information as required by the insurance regulator under the State Council.
The insurance regulator under the State Council and its local offices (hereinafter collectively referred to as "insurance regulators") shall implement administrative permission in light of statutory duties and procedures.
Article 15 Where a professional insurance agency company applies to engage in insurance agency business, the competent insurance regulator shall, by means of conversation, inquiry and on-site acceptance inspection, among others, learn and examine the operation and credit records of the applicant's shareholders, as well as such relevant matters as the applicant's market development strategy, business development plan, internal control system building, personnel structure, information system configuration and running, and conduct risk testing and give risk prompts.
Specific measures for concurrent-business insurance agency corporations to apply for engagement in insurance agency business shall be separately prescribed by the insurance regulator under the State Council.
Article 16 Where an insurance regulator legally makes a decision to approve a professional insurance agency company or a concurrent-business insurance agency corporation to engage in insurance agency business, it shall grant a permit to the applicant, who may carry out insurance agency business only after obtaining the permit and shall promptly register relevant information in the regulatory information system prescribed by the insurance regulator under the State Council.
Where an insurance regulator decides not to approve an application, it shall make a written decision and state the reasons. A professional insurance agency company which continues to exist shall legally go through the formalities for registration of alteration in such matters as its name, business scope and articles of association, thus ensuring that its name does not contain the words "insurance agency".
Article 17 A professional insurance agency company whose business area is not limited to the province, autonomous region, municipality directly under the Central Government or city specifically designated in the state plan where its place of registration is located may carry out insurance agency business within the territory of the People's Republic of China.
Where a professional insurance agency company whose business area is not limited to the province, autonomous region, municipality directly under the central government or city specifically designated in the state plan where its place of registration is located carries out insurance agency business outside its place of registration, it is required to set up branches locally. To set up branches, a provincial-level branch office shall be set up first to, as designated, handle matters concerning applications for administrative permission, and the submission of regulatory reports and statements, and be responsible for the management of other branches.
The branches of a professional insurance agency company shall include branch offices and business offices.
Article 18 Where a professional insurance agency company sets up a new branch to engage in insurance agency business, the following conditions shall be met:
1. neither the professional insurance agency company nor such branch has been subjected to a criminal penalty or major administrative punishment in the last one year;
2. neither the professional insurance agency company nor such branch is under investigation by the relevant department due to being suspected of committing any illegal or criminal offense;
3. neither the professional insurance agency company nor such branch has been subjected to any group petition or litigation event involving more than 30 persons or irregular centralized surrender event involving more than 100 persons in the last one year;
4. none of its branches set up in the last two years fall under any circumstance of market exit after operation for less than one year;
5. it has a refined branch management system;
6. its new branch has business premises, business and financial information management systems that meet the relevant requirements, and other facilities that match its business operation;
7. the main principal of its new branch meets the post-holding conditions hereof; and
8. other conditions prescribed by the insurance regulator under the State Council.
No professional insurance agency company which is determined to be a target of joint disciplinary action against dishonesty by the relevant authority of the State due to serious dishonesty and shall be subjected to corresponding disciplinary action in the field of insurance, or has any other bad record of serious dishonesty in the last five years may set up a new branch to engage in insurance agency business.
Article 19 A branch of a professional insurance agency company shall, within 15 days from the date of registration as set forth in its business license, report the same in writing to the competent insurance regulator, register relevant information in the regulatory information system prescribed by the insurance regulator under the State Council, make public disclosure as required, and submit application materials or reporting materials for approval of the post-holding qualification of its main principal.
Article 20 A concurrent-business insurance agency branch may carry out insurance agency business after obtaining corresponding authorization from the corporation and shall promptly report the relevant situation via the regulatory information system prescribed by the insurance regulator under the State Council.
Where a concurrent-business insurance agency corporation authorizes a branch of a province, autonomous region, municipality directly under the central government or city specifically designated in the state plan other than that where its place of registration is located to engage in insurance agency business, it shall designate a branch to be responsible for all matters concerning insurance agency business management in the region.
Article 21 A professional insurance agency falling under any of the following circumstances shall, within five days from the date on which such circumstance arise, report the same via the regulatory information system prescribed by the insurance regulator under the State Council, and make public disclosure thereof as required:
1.
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