Foreign investors are now permitted to operate insurance agency business in China
On 19 June 2018, China Banking and Insurance Regulation Commission (“CBIRC”) issued Notice on Permitting Foreign Investors to Operate Insurance Agency Business in China (“FIIA Notice”).
Previously, foreign investors were not permitted to operate insurance agency business in China, but only allowed to invest in no more than 25% of the shares of the insurance agency companies owned by Chinese companies/individuals.
Such restrictions have now been removed by FIIA Notice. The Notice permits foreign insurance agencies, which have operated insurance agency business outside China for over 3 years, to apply to establish a “foreign-invested insurance agency” (FIIA) in China. The Notice further permits foreign-invested insurance companies, which have operated insurance business in China for over 3 years, to apply to establish an FIIA. The “market access criteria” and the “business scope” of FIIAs would be governed by the rules that apply to the Chinese-invested insurance agencies.
FIIA Notice significantly opens up China’s insurance agency market to foreign investors. It means that foreign investors would be treated exactly the same way as Chinese investors on both establishment and operation of insurance agencies in China. It is a major step-forward in China Reform and Opening policy.
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