The first Chambers Asia Award: China held at the China World Hotel, Beijing on 6th May 2010. Grandall Legal Group was nominated for three awards – “Capital Markets Law Firm of the Year”, “Competition/Antitrust Law Firm of the Year” and “Insurance Law Firm of the Year”, and was finally honored with “Insurance Law Firm of the Year”.

The UK-based Chambers and Partners publishes a series of guides to the legal profession and is recognized as one of the most prestigious organizations in the analysis of the international legal market. In assessing the reputations and expertise of business lawyers across China, Chambers conducts extensive interviews with clients. The Chambers Asia Award: China honored the work of law firms in China. All 16 awards recognized a law firm’s pre-eminence in key practice areas. They also reflect notable achievements over the past 12 months including outstanding work, impressive strategic growth and excellence in client service. This is the first time that Chambers and Partners gave awards for Chinese market, so it drew great attention of all Chinese lawyers.

“A key player within this field, this firm works with major Chinese insurance companies. It has specialist expertise within all areas of insurance, and retains an impeccable reputation for its high-quality work.”

                                                                                       – Chambers and Partners Asia Award: China

 

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

The absence of specific rules on national security investigation on foreign investment in China has been labeled as one of the imperfections of the Anti-Monopoly Law of PRC (“AML”). Article 31 of AML only makes a passing reference to the necessity of conducting national security review when foreign capitals engage in acquisitions or other forms of concentrations that implicate China’s national security. Critics point to the general provision as inoperable in curtailing the massive inflow of foreign acquisitions into strategically important industries in China. To the author’s knowledge, no such investigation has been performed in China, since AML became effective on August 1, 2008.

It may be changed soon. Media reports say that a so called “National Security Investigation Mechanism” (国家安全审查机制) is probably going to be unveiled at the end of this year. At that time, an inter-agency committee charged with the investigation will be established. According to the reports, the committee shall have members from a galaxy of government bodies that represent broad and varied state interest, i.e., National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Science and Technology, Ministry of Commerce, Commission of Science, Technology and Industry of National Defense, Ministry of Agriculture, State-owned Assets Supervision and Administration Commission of the State Council, China Banking Regulatory Commission, State Administration for Industry & Commerce, State Administration of Taxation and several trade associations in key sectors of economy. It is reported that the draft bill on the national security policy was submitted to the State Council in March. The prelude to the unveiling came when Premier Wen Jiabao made the work report to the 3rd Session of the 11th National People’s Congress on March 5, when he is quoted to say that “in encouraging foreign capitals to participate in the restructuring and M&A of domestic enterprises, China shall accelerate the establishment of national security investigation regime.

Continue Reading China’s National Security Check on Foreign Investment About To Be Unveiled

In February, CIRC released the Regulation on the Basic Service of the Personal Insurance Business (“the Regulation”).

Background

The insurance industry, especially personal insurance business is experiencing a rapid and healthy development in the recent years. However, the phenomenon that the insurance companies give much weigh on the underwriting rather than the indemnity, has become more and more severe. This phenomenon has impeded the further development of the industry. In order to solve such problem, some local bureau of CIRC drafted related regulations, which have received positive effects, but the differences among the regions also incur problems for insurance companies to establish uniform internal regulations. The promulgation of the Regulation is CIRC’s response to such problems.

Continue Reading Regulation on the Basic Service of the Personal Insurance Business Published

Procedures for Stock Market Investment by Insurance Funds

For the qualified insurance companies and insurance asset management companies proposing to undertake equity investment in the public market, the following 2 steps shall be carried out initially: (1) entrusting the insurance funds in custody of a bank; (2) obtaining seats in the exchange market.

Continue Reading Investment in Stock Market by Insurance Funds （2）

Recently, CIRC revised the old Administrative Measures for Insurance Clauses and Premium of Property Insurance Company 2005 and published a new one (“New Administrative Measures”). The new one will be effected since 1st April of this year.

The New Administrative Measures were revised to be in line with the new Insurance Law which was published and effected last year and were mainly revised from three aspects: (1) completing filing system of insurance clauses and premium; (2) enhancing the management of compliance chief officer and actuary chief officer; (3) strengthening supervision of insurance companies in line with new Insurance Law. Specifically speaking, the New Administrative Measures put focus on the following points.

Continue Reading CIRC Published Revised Administrative Measures for Insurance Clauses and Premium of Property Insurance Company

In early March, 2010，Diageo, the world’s leading spirits maker signed a deal whereby it acquires majority shares of SiChuan Quanxing Group, a holding company that owns Shui Jing Fang(水井坊), reputedly China’s oldest white wine. What is remarkable about the transaction is that it is the first case in which foreign capital takes over Chinese white wine. To further make the deal unique is how surreally the white whine came into being. In 1998, Quanxing Group discovered a relic site when its workers were in the process of renovating factories. Archeological excavation showed that the site was originally a wine making workshop that dates back to Yuan Dynasty, over 600 years ago. With state-of-art bio technology, several active microbes were obtained from the workshop and used to produce the white whine, branded Shui Jing Fang(水井坊). The relic site was also listed by Guinness World Records as the world’s oldest wine making workshop.

On a rough look, the Diageo/Shui Jing Fang deal is remarkably similar to the Coca-Cola bid for Hui Yuan . For example, both involve world famous brands buying Chinese famous local brands, in effort to tap into the ever increasing beverage market in China. Given the doomed Coca Cola/Hui Yuan transaction on antitrust account, one is tempted to ask whether history will not repeat itself this time. Meanwhile, media report says Diageo is preparing regulatory filing with MOFCOM, which is the authority charged with policing merger market to prevent anticompetitive consequences. There are also market speculations on the fate of the deal in the hand of MOFCOM.

Continue Reading Can Foreign Capital “Drink” China’s Oldest White Wine?