A representative office in China of a foreign insurance company is in fact not a true commercial presence in China because a representative office and its employees are only allowed to conduct non-business activities in Chinese insurance market such as liaison, market research and are prevented from conducting or engaging in any business activities and providing insurance services. On the other hand, if an insurance company has a commercial presence in China, this means it can provide insurance services in China. But establishing a commercial presence such as foreign invested insurance company by a foreign insurance in China shall be subject to have a representative office in China for over two years. Therefore, setting up a representative office in China is the first step for a foreign insurance company who want to establish a commercial presence in China.

 

According to the Measures for the Administration of Resident Representative Offices in China of Foreign Insurance Institution, a foreign insurance institution applying to set up a representative office (“applicant”) shall meet the following conditions:

1, Having good business performance;2, If the foreign insurance institution conducts insurance business, it shall have conducted such insurance business for at least 20 years, or if the foreign insurance institution doesn’t conduct insurance business, it shall have been established for at least 20 year;3, Having no record of any grave violations of laws or regulations in the three year prior to the application date; and 4, Other prudential condition prescribed by CIRC.

The applicant shall submit the following materials to apply for the establishment of a representative office in China:

1, the official applicant form; 2, an application letter addressed to the chairman of CIRC, signed by the chairman of the Board of Directors or the General Manager; 3, a copy of the business license or lawful proof of commencement of business or certificate of registration issued by the relevant authorities in which the applicant registered; 4, the article of association, list of members of the Board of Directors, management personnel or principle partner; 5, annual report for the three year prior to the application date; 6, opinion issued by the relevant authorities in which the applicant registered, regarding the applicant’s establishment of a representative office in China, or a letter of recommendation issued by the relevant industry association. Such opinion or letter of recommendation shall refer to the applicant’s record of penalties received for the three years prior to the date of issue of the opinion or letter of recommendation; 7, a feasibility and necessity study report regarding the establishment of the representative office; 8, a power of attorney of the chief representative signed by the chairman of the Board of Directors or the General Manager; 9, a declaration by the applicant that the proposed chief representative has not been penalized by authorities in which the insurance company registered due to his or her illegal conduct of grave violation of laws and regulations in the three year prior to the applicant date; 10, the resume of the proposed chief representative; 11, other material prescribed by CIRC.