Provisions on the Supervision and Administration of Insurance Brokers
Provisions on the Supervision and Administration of Insurance Brokers
Provisions on the Supervision and Administration of Insurance Brokers
Order of China Insurance Regulatory Commission [2009] No. 6
September 25, 2009
The Provisions on the Supervision and Administration of Insurance Brokers, which have been adopted at the executive meeting of China Insurance Regulatory Commission on September 18, 2009, are hereby promulgated and shall come into effect as of October 1, 2009.
Wu Dingfu, CIRC President
Provisions on the Supervision and Administration of Insurance Brokers
Chapter I General Provisions
Article 1 These Provisions are hereby formulated in accordance with the Insurance Law of the People's Republic of China (the "Insurance Law") and other relevant laws and administrative regulations for the purpose of regulating the business activities of insurance brokers, protecting the legitimate rights and interests of the insurants, maintaining market order, and promoting the sound development of the insurance industry.
Article 2 For the purpose of these Provisions, "insurance brokers" shall mean institutions which, by charging certain commission as agreed, provide intermediary services in the course of concluding insurance contracts between the insurants and the insurance companies in favor of the insured. Insurance brokers shall include insurance brokerage companies and their branches.
Insurance brokers to be set up within the territory of the People's Republic of China shall meet relevant qualification requirements set by China Insurance Regulatory Commission ("CIRC") and obtain certain license in order to engage in insurance brokerage businesses (the "License").
Article 3 Insurance brokers shall abide by laws, administrative regulations and rules set by CIRC and follow the principles of free will, good faith and fair competition.
Article 4 If any loss is suffered by the insurant or the insured due to fault of the insurance brokerage institution, the insurance brokerage institution concerned shall bear compensation liabilities for such loss.
Article 5 CIRC shall be responsible for the supervision of insurance brokers according to the Insurance Law within the scope authorized by the State Council.
Dispatched offices set up by CIRC shall be responsible for the supervision of insurance brokers within the scope authorized by CIRC.
Chapter II Market Access
Section 1 Establishment of Insurance Brokers
Article 6 Unless otherwise stipulated by CIRC, insurance brokers shall be established in either of the following forms:
1. Limited liability company; or
2. Limited stockholding company.
Article 7 Establishment of an insurance professional agent shall satisfy the following requirements:
1. Its shareholders and initiators shall have good credit standing, and have no record of material violation of laws in the most recent three (3) years.
2. Its registered capital reaches the minimum amount specified in the Company Law of the People's Republic of China (hereinafter referred to as the "Company Law") and these Provisions.
3. Its articles of association comply with relevant provisions.
4. Its chairperson of the board, executive directors and senior managers satisfy the qualification requirements specified herein.
5. It has a sound organizational structure and management system.
6. It has a fixed domicile that matches its business scale.
7. It has computer software and hardware facilities for its business and financial affairs that satisfy its operation. And
8. It satisfies other requirements specified by laws, administrative regulations and the CIRC.
Article 8 The registered capital of an insurance brokerage company shall be no less than 10 million Yuan and shall be in the form of paid-in monetary capital.
Article 9 Units or individuals prohibited by laws or administrative regulations from investing in enterprises shall not act as the sponsor or shareholder of any insurance brokerage company.
If any employee of an insurance company is to invest in an insurance brokerage company, a written notice shall be sent to the employing insurance company. In the event that any director or senior management personnel of an insurance company or insurance intermediary institution is to invest in an insurance brokerage company, consent of the general shareholders' meeting or the shareholders' meeting shall be obtained according to the Company Law.
Article 10 The wording "insurance brokerage" shall be included in the name of each insurance brokerage institution. The font of the name of an insurance brokerage institution shall be different from the existing font of the name of insurance intermediary institutions unless otherwise regulated by CIRC.
Article 11 A representative or proxy shall be selected or appointed by the general shareholders and sponsors. Such representative or proxy shall be in charge of applying with CIRC for the establishment of the proposed insurance brokerage company.
Article 12 Branches of an insurance brokerage company shall mean its branch companies and business offices. Insurance brokerage companies applying for the establishment of a branch shall meet the following requirements:
1. It has a sound internal control system;
2. Its registered capital satisfies relevant requirements set out in these Provisions;
3. Its existing organs are under normal operation, and no major offenses are recorded in the year prior to the application date;
4. The proposed principal meets job qualification requirements set out in these Provisions; and
5. The proposed branch has a proper place of business and other business-related facilities.
Article 13 Insurance brokerage companies whose initial registered capital is equivalent to the minimum amount required under these Provisions may set up 3 branches. Each additional branch may require additional registered capital of 200, 000 Yuan. The first additional branch to be set up in any off-site provinces, autonomous regions or municipalities may require additional registered capital of 1 million Yuan.
Insurance brokerage companies whose initial registered capital reaches the amount required for setting up additional branches as set forth above may not increase any registered capital.
Insurance brokerage companies whose initial registered capital reaches 20 million Yuan may not increase any registered capital for setting up additional branches.
Article 14 After receiving the application for the establishment of an insurance brokerage institution, CIRC may make a risk disclosure to the applicant, and may have a talk with the applicant on matters concerning the establishment of that insurance brokerage institution. CIRC may inquire about the proposed institution's market exploration strategies, business development plans, internal control systems, personnel structure, and other relevant information.
CIRC may conduct an on-site inspection in line with actual needs.
Article 15 Where CIRC legally approves an application for establishment of an insurance brokerage institution, it shall issue a License to the applicant.
After receiving the License, the applicant shall go through registration formalities with the administrative authorities of industry and commerce and obtain a business license from such authorities. Only after obtaining the business license may the institution run business.
The License shall automatically expire if the insurance brokerage institution holding such License fails to go through registration formalities with the administrative authorities of industry and commerce within 90 days upon receipt of the License.
Article 16 Insurance brokers duly set up shall report to CIRC in writing within 20 days upon receipt of their business licenses.
Article 17 Insurance brokerage companies may separate, merge or change its organizational form subject to approval of CIRC.
Article 18 Under any of the following circumstances, the insurance brokerage institution concerned shall report to CIRC in writing within 5 days upon occurrence of such events:
1. Change of its name or the name of its branches;
2. Change of its residence or the place of business of its branches;
3. Change of the name of its sponsors or major shareholders;
4. Change of its major shareholders;
5. Change of its registered capital;
6. Change of its ownership structure;
7. Modification of its articles of association; or
8. Cancellation of its branches.
Article 19 If the item to be changed involves information stated on the License, the insurance brokerage institution concerned shall hand in the original License, obtain a new License, and make public announcement to that effect according to the Administrative Measures for Insurance Licenses.
Article 20 The License shall remain valid for 3 years upon issuance.
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