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

Considering new problems generated in recent years, CIRC revised current Measures for Administrative Reconsideration of CIRC (hereinafter as “Old Measures”), and published the new one (hereinafter as “New Measures”). The New Measures has changed some significant aspects of procedures of administrative reconsideration and it will be effected from 1st of March. Continue Reading CIRC Published New Measures for Administrative Reconsideration of CIRC

Last week, I received an email from an American attorney, whose client encountered some problems concerning their insurance policy, a policy purchased from two Chinese Insurance Companies. In his email, he informed me that after the occurrence of an accident which was suppose to be covered in the insurance policy, the Chinese Insurance Companies refused to compensate his client. The insurer and the insured had different understandings of the policy clause. He wanted to know whether his client could seek help from the CIRC and if so, how they should go about doing so in China. In his email, some provisions in the Guideline of the Management of the Insurance Company issued by CIRC were quoted to inform me the CIRC functioned similar to the SEC in the US. I informed him the CIRC could not help, his client should bring this case to court or if there is an arbitration clause in the policy, the dispute could be arbitrated in the arbitration commission agreed by the parties.

Continue Reading The CIRC and Its Local Offices: Functions and Responsibilities

Within China’s emerging legal system the question of whether an extended warranty (extended service contract ) will be subject to increased regulation under the Insurance law of China remains unanswered.

For those who are interested in undertaking a venture of this nature within the Chinese market the answer is of fundamental importance. From an entrepreneurial stance, treating the contract as a non-insurance contract will optimize business efficacy, allowing potential investors ease of market access. It would not appear practical to subject such contracts to the rigors of insurance law. On the contrary, Consumer advocates often propose and lobby for such contractual agreements to be subject to the extensive regulation surrounding insurance contracts in order to protect consumer welfare. The basis of these arguments is premised upon an extended warranty being in the interest of the contracting company and not the consumer. Such groups often argue extended warranties (extended service contract) are simply an additional mean in which to profit from an existing product.
 Continue Reading Are Extended Warranties/Extended Service Contract Considered Insurance?

The first Insurance Law in China came into force in 1995 and was amended in 2002. There have been no other additional changes or modifications to the Insurance Law. Although the Chinese Supreme Court has drafted an Explanation to the Enforcement of the Insurance Law, these rules have yet to be utilized in practice. Thus, it is clear that the rules and regulations governing insurance in China has failed to keep pace with the rapid development in the market.   Continue Reading Chinese Insurance Law Legislation needs Improvement for Adequate Governance