The new revised Provision on the Qualifications of Directors, Supervisors and Senior Managers of Insurance Companies was published by CIRC and it will be effected on 1st of April. It could be seen as a storm of supervision blowing from CIRC at the beginning of the year. This provision adjusts the scope and manners of CIRC’s qualification management system, strengthens the qualification of directors, supervisors and senior managers, and improves the long lasting supervision regulation.
Firstly, the CIRC’s qualification management system has extended its scope of approving and changed the supervision method of senior mangers management. Now, supervisors and the head of auditing of insurance companies need to be checked and approved by CIRC under the new provision. For the aspect of senior managers management method, the examination and approval system has transited to check and approval system. Additionally, the supervision method for mangers of branch companies and sales departments has changed from reporting system to check and approval system.
Secondly, this provision strengthens the requirement of compliance to make the setting of qualification more strategic and appropriated. For example, a qualified general manager of insurance company shall have 8 years financial experiences or 10 years economic experiences rather than 5 years financial experiences or 8 years economic experiences as stipulated in old provision and he/she must have insurance experiences before. Further more, this provision adds an insurance legal and relevant knowledge test for all directors, supervisors and senior managers. However, for introducing high quality elite into this industry, this provision also set a general item that all persons who has desired knowledge, capability and experiences could be the general manager without restrains of working length and education level.
Finally, in order to avoid the problem of “focusing on check and approval but ignoring supervision”, this provision details the long lasting supervision system of directors, supervisors and senior managers. It clarifies the principal of auditing on the departure of Principal of board of directors and senior mangers and requires directors, supervisors and senior mangers to attend the training held by CIRC. In addition, under the new provision, CIRC will establish a complete directors, supervisors and senior mangers management information system. This system will record all basic information of all directors, supervisors and senior managers including basic application materials, position change information, auditing reports on departure, risk warning letters, CIRC talk records, criminal and administrative penalty records and other required information by CIRC. Those records will be seen as evidence for supervising frequent job-hopping of senior managers. Besides from above-mentioned changes, this provision also completes circumstances of suspending position and appointing interim person in charge.
The new provision sets new qualification requirements for directors, supervisors and senior managers. Therefore, it must be good for insurance institutes to improve its staff quality and internal control system. The insureds will also get benefits from the developing of insurance industry.