CBIRC Issues Insurance Asset Management Company Regulations, Cancels Foreign Investment Ceiling

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The China Banking and Insurance Regulatory Commission (CBIRC) recently issued the “Insurance Asset Management Company Regulatory Provisions” (保险资产管理公司管理规定), which are scheduled to come into effect on 1 September.

Key changes include removing ceilings on foreign ownership of insurance asset management companies, as well as supplementation of risk and regulatory provisions.

The Provisions cover five areas including:

  • Addition of specialist chapters on corporate governance, including shareholder duties, incentive and restraint mechanisms, independent directors, chief risk management officers and senior executives. Raising the independence of insurance asset management companies, and comprehensive strengthening of restraint via the system of corporate governance regulation.
  • Creation of a specialist chapter on risk management, covering risk management systems, risk management requirements, internal control and auditing, subsidiary risk management, affiliate transaction regulation, risk provisions, and emergency management. Strengthening of the risk management capability of insurance asset management companies.
  • Optimization of the equity structure design. Equal treatment for domestic and foreign insurance company shareholders in insurance asset management companies, and the cancellation of the ceiling on foreign shareholdings.
  • Optimization of operation principles and related requirements. Refinement of the business scope of insurance asset management companies.
  • Increasing and supplementing regulatory methods and restraints on regulatory breaches. Increasing and supplementing tier-based regulation, information disclosures, reporting of major events and other content, and enriching supervision and inspection measures and regulatory methods.

According to CBIRC China has seen the establishment of 33 insurance asset management companies since 2003, that currently have over 20 trillion yuan in assets under management via insurance asset management plans and trust management funds.