Authored by Zhan Hao (zhanhao@anjielaw.com) and Sharif Hendry (sharifhendry@anjielaw.com) at AnJie Law Firm.

The Chinese insurance market continues to grow unabated.  While structural changes have seen a drop-off in infrastructure investment and its corresponding high levels of GDP growth, the services sector, and finance in particular, is growing strongly. This shift towards a knowledge based, digital economy is fuelling growth not only in IT, pharmaceuticals and banking, but also insurance .This growth is in line with the government’s plan to target a doubling of the rate of insurance penetration (insurance premiums as a percentage of GDP) from its previous level of around 2.4% to 5% by 2020 . By this point it is expected that insurance premium income will have reached 4.5 trillion RMB, with total industry assets of 25 trillion RMB. If this aim comes to fruition, it would mean the Chinese insurance market usurping the US to become the world’s largest insurance market .

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 Authored by Zhan Hao (zhanhao@anjielaw.com), Sharif Hendry(sharifhendry@anjielaw.com), Yu Dan(yudan@anjielaw.com) and Chen Jun( chenjun@anjielaw.com) at AnJie Law Firm.

ZhongAn, a Chinese insurance company selling online insurance products, is representative of a new wave of “insurtech” companies; insurers engaging with online distribution models (or tech companies foraying into insurance) that recognize the gains to be had by entering this emerging market. The China Insurance Regulatory Commission (NDRC) has been forthright in recognizing and encouraging innovation centered on new types of insurance products and online distribution on a national level, and on the back of this favorable regulatory environment, companies and investors are following suit.

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Authored by Zhan Hao (zhanhao@anjielaw.com) and Sharif Hendry (sharifhendry@anjielaw.com) at AnJie Law Firm
 
Recent “ransomware” attacks worldwide, including greater China, have once again brought to the fore the nascent yet potent threat “cyber risks” present as an all-encompassing enterprise risk management challenge to corporations worldwide. Concordantly, the raft of operational consequences that can potentially cascade from an attack, including the liability of directors and officers for errors and omissions, reputational and market valuation knock-on effects, and regulatory compliance issues1, present an ever burgeoning opportunity for insurers to expand further into this potentially lucrative new line of business.
 

 

Authored by Zhan Hao (zhanhao@anjielaw.com) and Dong Xin at AnJie Law Firm

In China, amidst fierce competition amongst insurance companies, more and more investors, both domestic and foreign, are striving to enter this market. Relevant regulations concerning investment limits and the qualifications for shareholders to invest in Chinese insurance companies are a continuing focal point for potential investors.

 

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Authored by Dr. Zhan Hao (zhanhao@anjielaw.com) and Kang Xin at AnJie Law Firm.

A declaration of death is a civil declaration that may be granted when a natural person is missing from his or her usual residence and his or her whereabouts have been unknown for the requisite period set by law, and for which an interested person may apply to the people’s court. Article 23 of the General Principles of the Civil Law of the People’s Republic of China provides that:

"Under any of the following circumstances, an interested person may apply to the people’s court for the declaration of a citizen’s death: (1) if the citizen’s whereabouts have been unknown for four years; or (2) if the citizen’s whereabouts have been unknown for two years after the date of an accident in which he was involved."

 

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Authored by Zhan Hao (zhanhao@anjielaw.com) and Sharif Hendry (sharifhendry@anjielaw.com) at AnJie Law Firm

In the first meeting between Chinese President Xi Jinping and U.S. President Donald Trump at a summit held on 6-7 April 2017, the two leaders set the tone for future cooperation on a wide range of issues, not least market access between the two countries. According to Chinese and US officials, better access for US financial sector investments into China was mooted for inclusion as part of a “100 day plan” to improve trade-ties1. This could have interesting implications for the Chinese insurance industry, and make inward investment by US financial houses an increasingly advantageous proposition.

 

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    Authored by Dr. Zhan Hao (zhanhao@anjielaw.com) and Sharif Hendry(sharifhendry@anjielaw.com) at AnJie Law Firm

As of today, the recently adopted ‘China Risk Oriented Solvency System’, also known as “C-ROSS”, is theonly regime by which a Mainland insurer’s capital adequacy is regulated. Following the implementation of China’s 13th Five-Year plan in 2016, the China Insurance Regulatory Commission (CIRC), as the industry’s sole regulator, published an outline of the plan, including several goals relating to the reformation, innovation and regulation of the insurance industry. This draws interesting comparisons with the overseas capital adequacy regimes of other major jurisdictions, notably with Solvency II in the EU. Both these reforms mark a fundamental shift towards a risk-based, market-oriented approach to estimating capital requirements, being geared as they are towards individual insurance entities, rather than the previous "one-model-fits-all" approach.  This is expected to lead to greater market efficiency in managing risk, and enhance consumer protection. For China, it marks a renewed focus on both volume and value for the domestic insurance sector, implicitly recognizing that better risk management includes all drivers of product profitability, including product terms and conditions, guarantees, pricing and underwriting . As a result, the transition towards fully implementing, supervising and enforcing the C-ROSS regime is already having far reaching repercussions.

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Authored by Dr. Zhan Hao (zhanhao@anjielaw.com) and Wan Jia (wanjia@anjielaw.com) at AnJie Law Firm

The surety bond market has developed significantly for insurers in China since this year, and it has become one of the most important methods for financial guarantee. Due to the lack of clear judicial interpretations issued by the Supreme Court of PRC, however, the applicable laws pertaining to surety bonds issued by insurers in China, and their nature, are still highly controversial. This article seeks to analyze the very specific question of whether the “accessory principal” prescribed by the Guarantee Law of PRC, is applicable to surety bonds issued by the insurers in China. 

 
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    Authored by Dr. Zhan Hao (zhanhao@anjielaw.com) and Liang Bing (liangbing@anjielaw.com) at AnJie Law Firm

Since the issuance of Several Opinions of the State Council on Accelerating the Development of the Modern Insurance Service Industry on August 10, 2014, credit insurance has been increasingly applied in insurance practice. However, “credit insurance ” is different from “warranty” in Chinese Guarantee Law,and there is a heated discussion on the nature of a credit insurance.  

In the Chinese P2P or the other transactions, credit insurance is often used to protect creditors’ benefits. In this paper, we are going to discuss the points creditors need to be aware of.

 
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 Authored by Dr. Zhan Hao (zhanhao@anjielaw.com) and Wei Chuankai (weichuankai@anjielaw.com) at AnJie Law Firm

An extended warranty is a prolonged warranty offered to customers in addition to the standard warranty on a new item. It is provided for various products, such as automobile, electronic and electrical appliance in household and similar. It has been a popular dispute that whether an extended warranty is an insurance product for a long time.

According to Article 2 of the Insurance Law of the People’s Republic of China, “Insurance” is defined as: “The commercial insurance activities where an insurance applicant pays an insurance premium to an insurer under an insurance contract and the insurer undertakes to pay the insurance proceeds to compensate for the property loss caused by the occurrence of a potential incident specified in the insurance contract or pay the insurance proceeds when the insured dies, becomes disabled or sick or reaches a specified age, time limit or any other condition specified in the contract. ”

China Insurance Regulatory Commission (hereinafter referred to as “CIRC”) did not give more explanation on detailed elements of “Insurance”, but issued other regulations on the implied factors of “Insurance”, which indicates clues on distinction between extended warranty and insurance product. The distinctions between an extended warranty and an insurance product are as follows:

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