The China Banking and Insurance Regulatory Commission (CBIRC) is to change its rules and allow foreign firms to majority own insurance firms in the country.
The regulator said it is going to relax “the restrictions on foreign ownership of joint-venture life insurance companies and lift the foreign ownership up to 51%”.
This will also allow more flexibility in the market entry requirements for foreign-funded insurers.
It also removes entry criteria; such as having to be in operation for at least 30 years and the requirement to set up representative offices before opening for business in the country.
The changes will see foreign-funded companies having the same provisions and treatment as Chinese ones.
Changing criteria
“In order to regulate the shareholding management of foreign-funded insurance companies, the revised [rules] require foreign-funded insurance companies to have at least one normal-operating insurance company as the main shareholder, and further clarifies the responsibilities and obligations of the main shareholders, so as to ensure their sustainable and healthy operation,” the CBIRC added.
“In terms of unifying the regulatory standards for domestic and foreign-funded companies, the [rules] remove provisions on the management of branches of foreign-funded insurance companies.
“Policies on foreign-funded insurance companies in setting up branch offices are in line with those on Chinese insurance companies.”
The regulator added that the move will also make way for the complete scrapping of the restrictions on foreign ownership “in due course in 2020”.
The amendment was first announced in 2017, when the Chinese government said it would have lowered the limit within three years’ time.
