Last year, China Insurance Regulatory Commission (CIRC) promulgated the Guidelines on the Operation of the Board of Directors of Insurance Companies (hereafter refers to the Guidelines) whose provisions are, comparing with the Guiding Opinion on Regulating the Corporate Governance of Insurance Companies promulgated in 2006, more specific in many aspects such as the qualification of directors, the operation of directors board and its professional committee, secretary and assistant institutions of the directors board, corporate governance report, etc. The Guidelines, together with the Interim Measures for the regulation of Insurance Companies’ Independent Directors and the Interim Measures for the regulation of Affiliate Transaction of Insurance Companies, composes the primary system of the board of directors of insurance companies.

The main points of the Guidelines are stated below:

First, the Guidelines explicitly stipulate the procedures and contents of due diligence evaluation of directors, and requires the directors board to submit a due diligence report of directors to the general assembly of shareholders and the board of supervisors each year; meanwhile, in order to timely know the situation of remuneration, and to guide the administration on the remuneration of directors and managers thereof, the Guidelines requires the insurance company to disclose relevant information to CIRC in its corporate governance report.

Second, the Guidelines focus on the meetings rules of the board of directors. It regulates the whole process of the meetings of the board of directors, including the convening and presiding, proposal and notice, record and its preservation, etc., and explicitly stipulates the qualifications and duties of directors and the secretary of the board of directors.

Third, the Guidelines bring in outside supervision by stipulating the supervision of the CIRC, the report of the meetings, the attendance of observers as non-voting delegates and the report of the corporate governance, etc.

The purpose of the Guidelines lies in, through specifying relevant rules, enhancing the construction of the board of directors, regulating the operation of the board of directors, improving the decision-making quality of the board of directors and promoting the corporate governance of insurance companies.

With the improvement of regulation of the insurance companies in China, the CIRC issuing specific regulations and rules on insurance company, more frequently. Presently speaking, the prevention of risk is emphasized as the regulatory focus of the CIRC at the background of the financial crisis in the USA. Therefore the corporate governance of insurance companies, including the board of directors, has become a vital field for CIRC.