April 2010

Subordinate debt is an agreed unsecured debt between raiser and creditor(s) who has lower priority than other creditors, yet has higher priority over the raiser’s equity capitals.

Subordinate debt fund can be counted as Tier-II capitals in measuring an insurance company’s solvency status. Thus raising subordinate debt fund has become an important means of replenishing capitals by insurance companies. It is governed by CIRC’s Interim Measures on Management of Subordinate Term Debt of Insurance Company.

Subordinate debt has inherent risk. Creditors of insurance company’s subordinate debt can seek protection by virtue of the following methods:

Continue Reading Protection on Creditors of Subordinate Debts of Insurance Companies

As Chinese financial integration progress intensifies, increasing number of Chinese insurance companies are not content with limiting themselves to insurance business only. Rather, they have started to diversify their range of operations. By the end of 31 March 2010, China already has seven insurance group companies as well as one insurance holding company, with their combined total assets, net assets and premiums constituting 75% plus of the whole industry.Continue Reading An Analysis of the Impacts on Foreign Investments by New Measures on Insurance Group Companies

This is an article corresponding to the China Mobile case which was discussed at China Law Vision on April 21, 2009. On 23 October 2009 the Beijing Dongcheng District People’s Court announced the settlement of an Anti-Monopoly Law (AML) case brought by Zhou Ze, an activist lawyer in Beijing, against China Mobile, China’s largest mobile network operator.

Zhou alleged that China Mobile abused its dominant market position (DMP) and engaged in illegal price discrimination activities by charging additional monthly fees for services that he, as a subscriber, was not using. Zhou sought 1,200 yuan in compensation (an amount equal to his basic mobile fees for the last two years), and for China Mobile to stop charging its subscribers such fees. Consequentially,the state-owned giant agreed to pay Mr. Zhou 1,000 yuan ($146) to settle his claims over mandatory fees.

 Continue Reading The Ending of the ‘China Mobile’ Case

1. According to China Anti-Monopoly Law, we need the following information in order to evaluate whether a deal reaches the threshold of concentration filing in China:

a. The worldwide turnovers of the two parties.

To evaluate whether a certain concentration triggers anti-monopoly review, China’s authority looks at all turnover figures of all concentrating parties, regardless of spheres of business those turnovers are derived from. The only exception is that where the concentration involves asset acquisition, the turnover calculation for the seller refers to the turnover specific to the concentration. Continue Reading How to Calculate Turnovers under AML of China