On 1st May 2019, the official website of the China Banking & Insurance Regulatory Commission (CBIRC) published a news item setting out China’s intent to open its banking and insurance sectors to greater foreign participation, via twelve main initiatives. Of these twelve initiatives, four proposals relate specifically to the insurance sector:
- In contrast to existing regulation which permits only foreign insurance companies to be shareholders of CBIRC-regulated ‘foreign-invested insurers’ (FII) within China, the new proposals will allow any foreign financial institution to be a shareholder in an FII (subject to meeting certain criteria etc).
- Revocation of the requirement that a substantial shareholder in a CBIRC-regulated ‘foreign-invested broker’ (FIB) within China must, itself, have been in the business of insurance broking for a minimum of 30 consecutive years and must have minimum gross assets of at least 200 million USD.
- Allowing foreign insurance group companies to apply for and establish CBIRC-regulated insurance entities within China (insurers, brokers, agencies etc).
- Allowing both domestic and foreign insurance group companies to act as promoters and sponsors of new applications for the establishment of CBIRC-regulated insurance entities within China, provided such applications are treated and processed in accordance with China laws applicable to domestic-invested insurers (DII) in China.