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
Where the law stipulates or conditions that the parties to a contract agree on are met, an insurance contract may be rescinded if the parties to the contract reach a consensus through consultation or either a party to the contract executes the termination right to cancel the insurance contract. Usually, without consent of insurance companies, the insured may cancel the insurance policy unilaterally at any time. That because the insureds buy an insurance product is to protect them from unknown risks, so they have right to choose how and when to protect themselves. The Insurance Law (2009) stipulates that otherwise stipulated by other laws and regulations, or agreed by both parties in insurance contract, after the formation of insurance contract, the insurance contract may be rescinded by the insured. On the contrary, to protect the interest of insureds, the Insurance law (2009) generally prohibits the insurer to terminate the contract casually. Only under some special circumstances, the insurer may be allowed to cancel the insurance contract. Here we simply give a brief summary of those circumstances.Continue Reading Brief Summary of Circumstances of Terminating an Insurance Contract by Insurance Companies
According to the Administration of Stock Investments by Insurance Institutional Investors Tentative Procedure (hereinafter referred to as “Tentative Procedure”),as the “insurance institutional investors”, qualified insurance companies and insurance asset management companies are entitled to invest in stocks. Insurance companies include the insurance group companies and the insurance holding company. The difference of qualification requirements for insurance companies and insurance asset management companies [1] is, if the insurance asset management companies satisfy article 5 of the Tentative Procedure, they can invest in stocks directly without CIRC’s approval and if the insurance companies satisfy article 7 of the Tentative Procedure and get approval from CIRC, they can invest in stocks directly as well. Continue Reading Investment in Stock Market by Insurance Funds (1)
As we all know, capital is crucial for insurance company. Only with enough funds can an insurance company have ability to cover the exposures. With adequate capital, an insurance company may better develop the business, i.e. release more ads, or establish more branches, to make more profits. It is possible that during the operation, an insurance company has no sufficient capital to support its business, and under such circumstance, the insurance company will need to raise funds to replenish its capital.
Generally speaking, there are four ways for an insurance company to supplement its capital:1. IPO or Seasoned Equity Offering; 2. getting additional investment by current shareholders; 3.getting money from private offer; and 4. allotting subordinated debt. For Chinese insurance companies, the first three ways may encounter hurdles or difficulties in practice. First of all, IPO is not easy for insurance companies, because many of them, especially small and medium-sized insurance companies, may not be able to meet the high standard of IPO. Secondly, current shareholders may be more willing to use financial vehicle, rather than funds of their own, to run the insurance company. It might be very difficult to raise money from current shareholders. Lastly, due to the financial crises, many institutions have insufficient funds to make the investment. Then issuing subordinated debt becomes a practical option for many insurance companies. According to the CIRC, 10 insurance companies were approved in 2009 to issue subordinated debt. The total amount of debt reaches RMB 18 billion.Continue Reading The Issuing of Subordinated Debt of Insurance Companies in China
The shareholders’ qualification and the appointment qualification of directors, supervisors and senior management personnel of an insurance company shall, in accordance with the Provision on the Qualifications of Directors, Supervisors and Senior Managers of Insurance Companies newly revised by CIRC on January 8th, 2010 and Administration of Insurance Companies Regulation newly revised by CIRC on September 25th, 2009 and other regulations, be submitted to CIRC for examination and approval thereof. If they fail to perform their duties or there are significant negligence of duty, CIRC may order the insurance company to replace such personnel or cancel their appointment qualifications.Continue Reading Corporate Governance Structure of Insurance Companies
During Christmas holiday of 2009, China Pacific Insurance (Group) Co., Ltd was listed in the Stock Exchange of Hong Kong Limited, with the stock code”02601” and the stock name of “CPIC”. It became the forth insurance companies which were listed in foreign Stock Exchange in China. The other three are PICC, China Life and Ping An Insurance. The IPO of CPIC gives more hopes for insurance companies to IPO in 2010. PICC just finished the reform to establish a joint stock system for enterprises and its CEO Wu Yan said in public that PICC will choose appropriate time to be listed in A share in future. Besides, China Reinsurance (Group) Corporation, Tian Ping Insurance Company, New China Life Insurance Company all show their ambitious to IPO. For many insurance companies, 2010 will be a starting year for them to IPO. Continue Reading 2010 Shall Be An IPO Starting Year For Insurance Companies
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
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.Continue Reading Revised Provision On The Qualifications Of Directors, Supervisors And Senior Managers Of Insurance Companies Published
The Seller/Buyer Warranty and Indemnity Insurance is a new type of insurance in the global insurance market. The Purpose of this insurance is to against the risks involved in the M&A process, especially those risks generated by the misrepresentation of the parties. The insured target of the Seller/Buyer Warranty and Indemnity Insurance is the representation and warranty provision in the M&A contract. Continue Reading The First Chinese Seller/Buyer Warranty And Indemnity Insurance Policy Is Underway
