1st Edition

The Regulation of Insurance in China

By Zhen Jing Copyright 2021
    1472 Pages
    by Informa Law from Routledge

    With the rapid development of China’s insurance industry and the opening of the Chinese insurance market to the world, Chinese insurance law and regulation has become an increasingly relevant topic for insurance practitioners and academics. The Regulation of Insurance in China therefore provides a much needed analysis of the Chinese regulatory system. This is the first systematic text written in English on the regulation of insurance in China and provides a comprehensive and systematic analysis of rules of law and administrative regulations on China’s insurance industry and insurance market, covering four level of regulatory hierarchy − the statutory law, the regulations enacted by the central government (the State Council), the regulations developed by the insurance supervision and regulation authority of the State Council, and self-regulations by the insurance industry.

    This book is essential reading for insurance companies and legal practitioners looking to do business in China, as well as reference for lawyers practising insurance law. It is also a useful resource for students and academics studying Chinese law.

    CHAPTER 1 Introduction of Insurance Regulation and

    Insurance Industry


    1.1 Introduction

    1.2 The nature of insurance

    1.3 Reasons and objectives of insurance regulation

    1.4 The outline of this book

    1.5 The development of China’s insurance industry

    1.6 The present insurance market in China

    1.7 The further development of the insurance industry

    1.8 Conclusion


    CHAPTER 2 Chinese Legal System and the Insurance


    2.1 Introduction

    2.2 Philosophical traditions of Chinese law

    2.3 The legislative system

    2.4 The judicial system

    2.5 Insurance legislation in China

    2.6 Administrative regulations by the State Council

      1. The judicial interpretations of statutory law by the SPC
      2. Regulations enacted by the insurance supervision and regulation authority of the State

    Council and other relevant regulatory authorities

      1. Self-regulation rules

    2.10 The regulatory framework of insurance in China

    2.11 Conclusion

    CHAPTER 3 Insurance Supervision and Regulation Authority

    and System

    3.1 Introduction

    3.2 A historical consideration of the development of insurance regulatory authority

    3.3 Statutory functions and responsibilities of the insurance supervision and

    regulation authority of the State Council

    3.4 The China Banking and Insurance Regulatory Commission

    3.5 The functions and responsibilities of local offices of the CBIRC

    3.6 The new duty of the local offices of the CBIRC to implement certain administrative licensing matters

    3.7 The allocation of responsibilities between the CBIRC and its local offices for the

    supervision and regulation of property insurance companies and reinsurance companies

    3.8 Methods of insurance supervision and regulation

    3.9 Corrective measures and administrative penalties

    3.10 Conclusion

    CHAPTER 4 Formation and Dissolution of Insurance


    4.1 Introduction

    4.2 Formation of insurance companies

    4.3 Formation of branch offices

    4.4 Formation of overseas insurance institutions

    4.5 Formation of reinsurance companies

    4.6 Formation and business scope of insurance group companies

      1. Regulation on modification, dissolution and abolition of insurance institutions
      2. Market access and withdrawal of non-insurance subsidiaries of insurance companies

    4.9 Supervision and administration of insurance institutions

    4.10 Supervision and administration of insurance group companies

    4.11 Conclusion

    CHAPTER 5 Regulation of Foreign-Funded Insurance

    Companies and the Representative Offices of

    Foreign Insurance Institutions

    5.1 Introduction

    5.2 Regulation on the administration of foreign-funded insurance companies

    5.3 The Implementation Rules for the RAFFIC

    5.4 Administration of representative offices of foreign insurance institutions in China

    5.5 Conclusion

    CHAPTER 6 Regulation of Administrative Licencing and

    Insurance Permits

    6.1 Introduction

    6.2 The principles of insurance licensing

    6.3 Administrative licensing and insurance permits

    6.4 The Provisions on Implementation Procedures of Administrative Licensing

    6.5 Regulation of insurance permits

    6.6 Conclusion

    CHAPTER 7 Regulation of Corporate Governance

    7.1 Introduction

    7.2 The legal framework for corporate governance of insurance companies

    7.3 Statutory requirements for directors, supervisors and senior officers of insurance


    7.4 Requirements for directors, supervisors and senior officers formulated by the CBIRC

      1. The regulation of corporate governance structure

    7.6 Regulation of the operation of the board of directors of insurance companies

    7.7 Administration of auditing of directors and senior managers of insurance companies

      1. Internal audit of insurance companies

    7.9 Guidelines for salary management rules of insurance companies

    7.10 Compliance management of insurance companies

    7.11 Related-party transactions of insurance companies

    7.12 Risk management of insurance companies

    7.13 Comprehensive risk management of personal insurance companies

    7.14 Internal control of insurance companies

    7.15 Evaluation of insurance company corporate governance

    7.16 Corporate governance of insurance group companies and of insurance groups

    7.17 Information disclosure by insurance companies

    7.18 Corporate governance action plan for three years from 2020 to 2022

    7.19 Conclusion

    CHAPTER 8 Regulation of Equites of Insurance Companies

    8.1 Introduction

    8.2 Classification of equites of insurance companies

    8.3 Qualifications of shareholders

    8.4 Acquisition of equities

    8.5 Funds for acquiring equities

    8.6 Behaviours of shareholders

    8.7 Management of equity matters

    8.8 Submission of materials to the CBIRC

    8.9 Supervision and administration

    8.10 Equity information disclosure by insurance companies

    8.11 Conclusion

    CHAPTER 9 Regulation of Insurance Business

    9.1 Introduction

    9.2 An overview of law and regulations for insurance business

    9.3 The regulation on scope of insurance business

    9.4 Statutory and regulatory requirements for insurance clauses and premium rates

    9.5 Regulation of insurance clauses and premium rates of property insurance

    9.6 Regulation of insurance clauses and premium rates of commercial motor vehicle


    9.7 Regulation of insurance clauses and premium rates of personal insurance

    9.8 Development of insurance products by property insurance companies

    9.9 Improving the product supervision of property insurance companies

    9.10 Strengthening the supervision of personal insurance products

    9.11 Regulation of product development and design of personal insurance companies

    9.12 Regulation of information disclosure of insurance products

    9.13 Premium rate adjustment and information disclosure of long-term medical insurance


    9.14 Regulation of actuaries

    9.15 Regulation of reinsurance business

    9.16 Conclusion

    CHAPTER 10 Regulation of Conduct of Insurance Companies

    10.1 Introduction

    10.2 Legal framework for the regulation of the conduct of insurers

    10.3 Regulation of the conduct of insurance business

    10.4 Regulation on conduct of insurers in advertising or selling insurance products

    10.5 Prohibition of misconducts of insurers and their employees

    10.6 Guidelines for the determination of misleading sales of personal insurance

    10.7 Guiding opinions on liability for misleading sales of personal insurance

    10.8 The basic services of the personal insurance business

    10.9 Telephone sales of insurance products

    10.10 Retrospective administration of insurance sales practices

    10.11 Electronic return visit of life insurance

    10.12 Regulation of the conduct of insurance claims

    10.13 Evaluation of the service of insurance companies

    10.14 Evaluation of the business operation of insurance companies

    10.15 Conclusion

    CHAPTER 11 Regulation of Solvency

    11.1 Introduction

    11.2 The legal framework of regulation of solvency

    11.3 The first generation of solvency regulation system

    11.4 The conceptual framework of the second generation of solvency regulation system

    11.5 The documentary framework of C-ROSS

    11.6 The impact of the C-ROSS

    11.7 The second phase of the construction of the C-ROSS

    11.8 Capital guarantee funds

    11.9 The management of reserves for non-life insurance businesses of insurance companies

    11.10 Conclusion

    CHAPTER 12 Regulation of the Use of Insurance Funds

    12.1 Introduction

    12.2 The current state of insurance funds utilization

    12.3 Regulatory principles for insurance funds utilization

    12.4 An overview of the regulatory framework regarding the use of insurance funds

    12.5 Channels for the use of insurance funds

    12.6 Insurance funds in bank deposits

    12.7 Insurance funds investment in bonds

    12.8 Insurance funds investment in stocks

    12.9 Investment of insurance funds in real estate

    12.10 Indirect investment of insurance funds in infrastructure projects

    12.11 Insurance funds investment in equities

    12.12 Investing insurance funds in infrastructure debt investment plans

    12.13 Insurance funds investment in collective trust funds

    12.14 Investment of insurance funds in venture capital funds 

    12.15 The proportional regulation of the utilization of insurance funds

    12.16 Modes of insurance funds utilization

    12.17 Entrusted investment of insurance funds

    12.18 Regulation of the insurance asset custody business

    12.19 Decision–making operating mechanisms for insurance funds utilization

    12.20 Risk management and control for insurance funds utilization

    12.21 Supervision and administration for insurance funds utilization

    12.22 Overseas investment with insurance funds

    12.23 Administration of insurance assets management companies

    12.24 Insurance asset allocation management

    12.25 Internal control of insurance funds

    12.26 The scoring supervision over internal control and regulatory compliance in the use of

    insurance funds

    12.27 Five-grade risk based insurance asset classification

    12.28 Disclosure of capital use information by insurance companies

    12.29 Conclusion

    CHAPTER 13 Regulation of Insurance Agents

    13.1 Introduction

    13.2 Insurance intermediaries market in China

    13.3 General agency principles

    13.4 Regulations of insurance agents

    13.5 The duties of insurance agents

    13.6 Supervision and administration of insurance agents

    13.7 Regulation of side-line bancassurance business

    13.8 Strengthening the supervision and administration of insurance intermediaries

    13.9 Strengthening the administration of intermediary channel of insurance companies

    13.10 Conclusion

    CHAPTER 14 Regulation of Insurance Brokers

    14.1 Introduction

    14.2 Insurance brokerage market in China

    14.3 An overview of regulation of insurance brokers

    14.4 The features of insurance brokers

    14.5 The business scope of insurance broker

    14.6 The duties of insurance brokers

    14.7 Insurance brokers’ liability for loss and damages caused to the proposers

    14.8 Regulatory rules for insurance brokers

    14.9 Foreign-funded insurance brokers

    14.10 Conclusion

    CHAPTER 15 Regulation of Insurance Adjusters

    15.1 Introduction

    15.2 The development of insurance adjusters

    15.3 The Provisions on the Supervision and Administration of Insurance Adjusters

    15.4 The basic rules for insurance adjusting

    15.5 Foreign investors are permitted to operate loss adjusting business in China

    15.6 Factors which affects legal effect of an insurance adjusting report

    15.7 Conclusion


    CHAPTER 16 Health Insurance

    16.1 Introduction

    16.2 The present position of commercial health insurance in China

    16.3 An overview of the regulatory framework for commercial health insurance

    16.4 The Opinions of the General Office of the State Council on Accelerating Development

    of Commercial Health Insurance 2014

    16.5 The Measures for the Administration of Health Insurance

    16.6 Health insurance business with individual tax preferences

      1. Critical illness insurance
      2. Conclusion

    CHAPTER 17 Pension Insurance

    17.1 Introduction

    17.2 The legal framework for the regulation of commercial pension insurance

    17.3 The State Council’s opinions on the development of commercial pension insurance

    17.4 The measures for the administration of old-age security management business

    17.5 The programme of the elderly housing reverse mortgage pension insurance

    17.6 The programme of individual tax-deferred commercial pension insurance business

    17.7 The Interim Measures for the Administration of the Utilization of Individual Tax-

    Deferred Commercial Pension Insurance Funds

      1. Conclusion

    CHAPTER 18 Agriculture Insurance

    18.1 Introduction

    18.2 An overview of the regulatory framework for agriculture insurance in China

    18.3 Development of agriculture insurance in China

    18.4 The State Council’s Regulation of Agriculture Insurance

    18.5 Qualification requirements for an insurance company to conduct agriculture insurance

    18.6 Agriculture insurance contracts clauses and premium rates

    18.7 The drafting of clauses on agriculture insurance products subsidized by the central


    18.8 Catastrophe risk reserve of agriculture insurance

    18.9 Underwriting and claim handing of agriculture insurance 

    18.10 Premium subsidies by governments

    18.11 The Pilot Programme on agricultural catastrophe insurance

    18.12 The Pilot Programme of full cost insurance and income insurance for the three major

    grain crops

    18.13 Further development of agriculture insurance

    18.14 Self-regulation of agriculture insurance

      1. Typical crop insurance clauses

    18.16 Conclusion

    CHAPTER 19 Catastrophe Insurance

    19.1 Introduction

    19.2 The legal framework for catastrophe insurance

    19.3 The China Urban and Rural Residential Building Earthquakes Catastrophe Insurance

    Pool and the early development of the catastrophe insurance system

    19.4 The Implementation Plan for Establishing the Catastrophe Insurance System for Urban

    and Rural Residential Housing in Earthquakes

    19.5 The Measures for the Administration of the Special Reserve Fund for Urban and Rural

    Residents' Earthquake Catastrophe Insurance

    19.6 The Model Insurance Clauses for Urban and Rural Residents Housing Earthquake

    Catastrophe Insurance

    19.7 Earthquake insurance practice in Sichuan Province

    19.8 Earthquake insurance systems in other countries

    19.9 Conclusion

    CHAPTER 20 Motor Vehicle Insurance

    20.1 Introduction

    20.2 Legal framework for motor insurance

    20.3 Compulsory motor insurers

    20.4 Persons who are required to take compulsory motor insurance

    20.5 The scope of the insured persons

      1. The limits of the amount covered under a compulsory motor insurance policy

    20.7 The scope of the third party victims

    20.8 The insured’s pre-contractual duty of disclosure

    20.9 The insurer’s pre-contractual duty to explain the content of the contract

    20.10 The contents of a compulsory motor insurance contract

    22.11 The Road Traffic Accident Social Relief Fund

    20.12 The third party rights against the insurers

    20.13 Non-compulsory commercial motor insurance

    20.14 Conclusion

    CHAPTER 21 Regulation of Internet Insurance

    21.1 Introduction

    21.2 The development of Internet insurance in China

    21.3 Regulation of internet insurance

    21.4 Guarantee insurance business on Internet platform

    21.5 Retrospective management of Internet insurance sales activities

    21.6 Conclusion

    CHAPTER 22 Regulation of Mutual Insurance Organisations

    22.1 Introduction

    22.2 The development and significance of mutual insurance in China

    22.3 Pilot Measures for the Supervision and Administration of Mutual Insurance


    22.4 Conclusion

    CHAPTER 23 Protection of Insurance Consumers

    23.1 Introduction

    23.2 Legal framework for the protection of the insurance consumers

    23.3 Insurance consumer confidence index

    23.4 An overview of the insurance security fund

    23.5 The Administration of insurance security fund

    23.6 The business operation of the Insurance Security Fund Co. Ltd

    23.7 The construction of system and mechanisms for protection of consumers

    23.8 The handling of consumers’ complains

    23.9 Consumers disputes resolution

    23.10 Conclusion

    CHAPTER 24 The Self-Regulatory Institutions

    24.1 Introduction

    24.2 The Insurance Association of China

    24.3 Insurance Asset Management Association of China

    24.4 Insurance intermediary associations

    24.5 Conclusion


    Appendix 1 The Insurance Law of the People’s Republic of China


    Professor Zhen Jing is Chair in Commercial Law at the School of Law, Bangor University. She has taught insurance law for many years and has practical experience in the Chinese insurance industry. She is author of Chinese Insurance Contracts: Law and Practice which was awarded the 2017 British Insurance Law Association Book Prize.