Administrative Provisions on Reinsurance Business
Administrative Provisions on Reinsurance Business
Administrative Provisions on Reinsurance Business
Order of the China Banking and Insurance Regulatory Commission [2021] No.8
July 21, 2021
The Administrative Provisions on Reinsurance Business, deliberated and adopted at the fourth commission meeting in 2021 of the China Banking and Insurance Regulatory Commission on April 23, 2021, are hereby promulgated and shall come into force as of December 1, 2021.
Guo Shuqing, Chairman
Administrative Provisions on Reinsurance Business
Chapter I General Provisions
Article 1 In order to regulate and develop the reinsurance market, strengthen the administration of the reinsurance business, and realize the healthy, harmonious and sustainable development of the insurance industry, these Provisions are formulated in accordance with the Insurance Law of the People's Republic of China (hereinafter referred to as the "Insurance Law"), the Administrative Regulations of the People's Republic of China on Foreign-invested Insurance Companies and other relevant laws and administrative regulations.
Article 2 For the purposes of these Provisions:
"Reinsurance" shall mean the business activities in which an insurer transfers part of the insurance business it has undertaken to another insurer or other insurers.
"Direct insurance", also known as original insurance, is an opposite concept of reinsurance and shall mean the insurance business for which an insurance contract is directly entered into between and by a policyholder and an insurer.
"Retrocession" shall mean the business activities in which the reinsurer transfers the ceded insurance business to another insurer or other insurers.
"Treaty reinsurance" shall mean the business activities in which an insurer enters into a contract in advance with another insurer or other insurers for the purpose of reinsuring part of the insurance business it has undertaken with such other insurer(s) within a specified period and the reinsurer shall undertake the reinsurance liabilities in accordance with the agreed qualifications of reinsurance.
"Facultative reinsurance" shall mean the business activities in which an insurer temporarily enters into an agreement with another insurer or other insurers for the purpose of reinsuring part of the insurance business it has undertaken with such other insurers(s) on a policy-by-policy basis and the reinsurer shall agree on the qualifications of reinsurance and assume the reinsurance liabilities on a policy-by-policy basis.
"Proportional reinsurance" shall mean a type of reinsurance in which the self-retained amount of the cedant and the reinsured amount of the reinsurer are determined on the basis of the insured amount.
"Non-proportional reinsurance" shall mean a type of reinsurance in which the liabilities assumed by the cedant itself and the reinsurance liabilities assumed by the reinsurer shall be determined on the basis of the indemnity amount.
Article 3 For the purposes of these Provisions:
"Cedant" shall refer to an insurer who transfers part of the insurance business it has undertaken to another insurer or other insurers; while "reinsurer" shall refer to an insurer that receives the insurance business transferred by another insurer.
"Ceding business" shall refer to the insurance business transferred by a cedant to another insurer or other insurers, while "ceded business" shall refer to the insurance business accepted by the reinsurer from other insurers.
"Direct insurance company", also known as the original insurance company, is an opposite concept of reinsurer and shall mean any insurer that directly concludes an insurance contract with policyholders.
"Insurance consortium" shall mean any organization that is jointly formed by two or more insurers to engage in insurance business together in accordance with the articles of association thereof to handle insurance business with special risks or of an enormous amount that cannot be undertaken by a single insurer, or pursuant to the international practice.
"Insurance broker" shall mean an insurance brokerage institution that, under the entrustment of the cedant, provides intermediary services for the arrangement of reinsurance business between the cedant and the reinsurer based on the cedant's benefits, and receives commission as agreed.
Article 4 Any insurer, insurance consortium, insurance broker and other insurance organizations established within the territory of the People's Republic of China (excluding Hong Kong, Macao and Taiwan) shall, when handling reinsurance business, abide by these Provisions.
Article 5 Any insurer, insurance consortium and insurance broker shall, when handling reinsurance business, comply with the principles of prudence and utmost good faith.
Article 6 Any cedant, reinsurer and insurance broker shall be obligated to keep confidential all commercial secrets or other confidential information obtained in the course of conducting reinsurance business.
Article 7 The China Banking and Insurance Regulatory Commission (hereinafter referred to as the "CBIRC") encourages any insurer, insurance consortium and insurance broker to actively provide insurance and reinsurance services for agricultural insurance and the insurance for such catastrophes as earthquake, typhoon, flood and public health emergencies and national key projects.
Article 8 The CBIRC shall conduct supervision and administration of reinsurance business according to the law.
Chapter II Business Operation
Article 9 An insurer shall formulate a reinsurance strategy, and clarify the role of reinsurance in the company's risk and capital management strategy.
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Order of the China Banking and Insurance Regulatory Commission [2021] No.8
July 21, 2021
The Administrative Provisions on Reinsurance Business, deliberated and adopted at the fourth commission meeting in 2021 of the China Banking and Insurance Regulatory Commission on April 23, 2021, are hereby promulgated and shall come into force as of December 1, 2021.
Guo Shuqing, Chairman
Administrative Provisions on Reinsurance Business
Chapter I General Provisions
Article 1 In order to regulate and develop the reinsurance market, strengthen the administration of the reinsurance business, and realize the healthy, harmonious and sustainable development of the insurance industry, these Provisions are formulated in accordance with the Insurance Law of the People's Republic of China (hereinafter referred to as the "Insurance Law"), the Administrative Regulations of the People's Republic of China on Foreign-invested Insurance Companies and other relevant laws and administrative regulations.
Article 2 For the purposes of these Provisions:
"Reinsurance" shall mean the business activities in which an insurer transfers part of the insurance business it has undertaken to another insurer or other insurers.
"Direct insurance", also known as original insurance, is an opposite concept of reinsurance and shall mean the insurance business for which an insurance contract is directly entered into between and by a policyholder and an insurer.
"Retrocession" shall mean the business activities in which the reinsurer transfers the ceded insurance business to another insurer or other insurers.
"Treaty reinsurance" shall mean the business activities in which an insurer enters into a contract in advance with another insurer or other insurers for the purpose of reinsuring part of the insurance business it has undertaken with such other insurer(s) within a specified period and the reinsurer shall undertake the reinsurance liabilities in accordance with the agreed qualifications of reinsurance.
"Facultative reinsurance" shall mean the business activities in which an insurer temporarily enters into an agreement with another insurer or other insurers for the purpose of reinsuring part of the insurance business it has undertaken with such other insurers(s) on a policy-by-policy basis and the reinsurer shall agree on the qualifications of reinsurance and assume the reinsurance liabilities on a policy-by-policy basis.
"Proportional reinsurance" shall mean a type of reinsurance in which the self-retained amount of the cedant and the reinsured amount of the reinsurer are determined on the basis of the insured amount.
"Non-proportional reinsurance" shall mean a type of reinsurance in which the liabilities assumed by the cedant itself and the reinsurance liabilities assumed by the reinsurer shall be determined on the basis of the indemnity amount.
Article 3 For the purposes of these Provisions:
"Cedant" shall refer to an insurer who transfers part of the insurance business it has undertaken to another insurer or other insurers; while "reinsurer" shall refer to an insurer that receives the insurance business transferred by another insurer.
"Ceding business" shall refer to the insurance business transferred by a cedant to another insurer or other insurers, while "ceded business" shall refer to the insurance business accepted by the reinsurer from other insurers.
"Direct insurance company", also known as the original insurance company, is an opposite concept of reinsurer and shall mean any insurer that directly concludes an insurance contract with policyholders.
"Insurance consortium" shall mean any organization that is jointly formed by two or more insurers to engage in insurance business together in accordance with the articles of association thereof to handle insurance business with special risks or of an enormous amount that cannot be undertaken by a single insurer, or pursuant to the international practice.
"Insurance broker" shall mean an insurance brokerage institution that, under the entrustment of the cedant, provides intermediary services for the arrangement of reinsurance business between the cedant and the reinsurer based on the cedant's benefits, and receives commission as agreed.
Article 4 Any insurer, insurance consortium, insurance broker and other insurance organizations established within the territory of the People's Republic of China (excluding Hong Kong, Macao and Taiwan) shall, when handling reinsurance business, abide by these Provisions.
Article 5 Any insurer, insurance consortium and insurance broker shall, when handling reinsurance business, comply with the principles of prudence and utmost good faith.
Article 6 Any cedant, reinsurer and insurance broker shall be obligated to keep confidential all commercial secrets or other confidential information obtained in the course of conducting reinsurance business.
Article 7 The China Banking and Insurance Regulatory Commission (hereinafter referred to as the "CBIRC") encourages any insurer, insurance consortium and insurance broker to actively provide insurance and reinsurance services for agricultural insurance and the insurance for such catastrophes as earthquake, typhoon, flood and public health emergencies and national key projects.
Article 8 The CBIRC shall conduct supervision and administration of reinsurance business according to the law.
Chapter II Business Operation
Article 9 An insurer shall formulate a reinsurance strategy, and clarify the role of reinsurance in the company's risk and capital management strategy.
......