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
Legislation
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
- The judicial interpretations of statutory law by the SPC
- Regulations enacted by the insurance supervision and regulation authority of the State
Council and other relevant regulatory authorities
- 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
Companies
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
- Regulation on modification, dissolution and abolition of insurance institutions
- 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
companies
7.4 Requirements for directors, supervisors and senior officers formulated by the CBIRC
- 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
- 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
insurance
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
products
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
- Critical illness insurance
- 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
- 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
treasury
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
- 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
- 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
Organizations
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
Biography
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.
