What restrictions are in force on the insurance market?
The Management Regulation on Foreign-Invested Insurance Companies, passed in late 2001, limits regulatory review of the application process for entry into China's insurance market to eight months. To submit applications, insurers must have at least US$ 5 billion in global assets and have had a representative office in China for at least two years. Foreign insurers may not hold licenses for both life and non-life insurance operations.
Rules also state that joint and wholly foreign-owned ventures must commit US$ 24 million in registered capital (the amount subsidiaries must inject in operating capital depends on the number of branches), though the China Insurance Regulatory Commission (CIRC) may increase these amounts for new entrants at any time. CIRC also requires 20% of the capital injection to be placed into a guarantee fund at a CIRC-designated bank as a form of security deposit. A restriction requiring 20% of reinsurance to be directed to domestic reinsurers will be phased out by December 11, 2005, though the reinsurance of RMB premiums abroad will remain constrained by capital account controls.