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The new version of the Insurance Law that came into force October 2009 made it clear that insurance companies would have more investment channels are open for insurance funds, specifically, the 2009 Insurance Law stated that investing insurance funds in real estate was acceptable. In September 2010, the CIRC promulgated the Provisional Measures for Insurance Capital Investment in Real Estate. This regulation provides the basic outline of what the types of real estate projects that insurance companies can invest in. Although this regulation is in place, it appears that the CIRC is not ready to approve insurance companies investing real estate projects, but announcement can probably be taken as evidence that CIRC is moving closer to being ready to approve insurance companies investing in real estate projects. Also based on Chairman Wu's statements it probably can be assumed that the first real estate project that insurance company investing will be located in Shanghai, and it most likely be a housing project that is subsidized to keep its prices affordable.

If you have any questions about the potential for insurance funds to be invested in real estate development projects, or if you would like more details on the Provisional Measure for Insurance Capital Investment in Real Estate please contact us.

The information contained in this post is available at: http://www.chinadaily.com.cn/usa/business/2011-03/07/content_12130923.htm

There has been some speculation about the types of products that will be offered through the exchange and who will able to participate in it, but since there are no details at all about the exchange, including the fact that the CIRC did not provide a time line on when it expect to open the exchange, there is no way of knowing what to expect of a the potential Shanghai insurance exchange. However, the speculation is interesting because by considering opening an exchange it sounds like the CIRC could be open to more innovation in the Chinese insurance market, and some individuals have speculated that the CIRC is considering making the exchange more of a place where property and casualty policies, group life insurance policies, and reinsurance could be quickly and easily bought and sold, instead of a place where hard to place risks and excess or surplus lines are placed. In addition, if reinsurance if going to be available through the exchange it raises the possibility that foreign insurers and reinsurers will be able to be involved in the exchange in some capacity because China's WTO commitments state that China allow international insurers to write reinsurance business from outside of China.

If you would like more information about what a insurance exchange could potentially mean for the Chinese insurance market please contact us.

The information contained in this article is available at: http://www.chinadaily.com.cn/usa/business/2011-03/07/content_12130923.htm

As part of improving how bank based insurance sales activities are handled, the Chairman is asking local CIRC offices to pay attention to the letters and visits they receive from the public because these letters and visits will let them know how the insurance purchasers feel about the insurance industry's behavior the area that the local office is in charge of regulating. He believes that by focusing on insurance consumers' concerns the local CIRC offices will be able to stop activities that violate the insurance law and effectively protect the interests of insurers and insurance policy purchasers.

Moreover, he wants local CIRC offices to study the issues that insurance consumers are informing them are occurring, and he wants the local offices to provide their enforcement staff written instructions on how to effectively remedy the issues that the insurance consumers are concerned with so that illegal activities associated with bank based insurance policy sales will be reduced.

Specifically, the Chairman has asked that these written instructions address many topics, including, the following issues:

1. Local CIRC offices should instruct their staff to increase their observation of public opinion, and increase their enforcement of insurance agents information disclosures to insurance policy purchasers to ensure that insurance consumers interests protected.

2. The local CIRC office instructions must establish a system to improve the public's knowledge about insurance. The local offices should work with insurers, insurance associations, and insurance agents to develop a system to improve the public's understanding what buying insurance means, what insurance claims handling entails, what premium and insurance benefit payments mean, and what insurance policy dispute resolution entails. The overall hope for this education drive is to improve the publics understanding of insurance in order to make insurance consumers more savvy so that they can make better choices about their insurance purchases in the future.

3. The local CIRC offices should attempt to improve insurance contract dispute resolutions by increasing the number of mediation channels available through having CIRC staff push insurance companies to improve claims handling services and resolve policy disputes more quickly. The instructions should also tell CIRC staff to work with insurance associations to strengthen how they handle complaints, disputes, and how they promote efficient mediations. Finally, this the instructions should tell the CIRC staff to work with the judiciary to help improve mediation so that litigation in court is less necessary.

4. The local CIRC office should instruct their staff to increase how much credence they give insurance consumers'' complaint letters. The Chairman hopes that increasing the attention that the local office's pay to complaint letters will show that public that their concerns about the insurance industry are being effectively addressed, which will hopefully improve the public's faith that the CIRC is prioritizing their interests.

5. The local CIRC office should write instructions that tell their staff that they should provide the central CIRC feedback on the complaints they are receiving and the most effective methods they developed for addressing those complaints. Providing the central CIRC this feedback will help it understand more about the activities in the local insurance markets, and it can attempt to implement the most effective systems on a nationwide basis to improve the CIRC's regulatory activities throughout all China.

The Chairman's hopes that the local CIRC offices find creative ways to implement these directives for instructions that they should provide their staff. The Chairman hopes that this creativity will help the CIRC solve difficult problems and create best practices that will help the it improve its regulatory enforcement on issues that public has expressed concerns about. Furthermore, the Chairman hopes that the local staff implementing this directive will improve the CIRC's interaction with the public and its regulatory transparency. Finally, the Chairman states that the local CIRC offices should provide the central CIRC regular reports on how they are implementing this announcement so that the CIRC will know that the local offices are implementing its directives.

If you would like more details on Chairman Wu's announce, and the requirements that the CIRC has for the local office written instructions, please contact us. Or if you have any questions about developments in the Chinese bank assurance industry and the potential for international insurance institutions to enter it, please contact us.

The information contained in this post is available at: http://www.law-star.com/cacnew/201102/740068821.htm

In this report, the Shanxi CIRC noted that it created a website where insurance purchasers and providers could directly ask it questions about its rules for the insurance industry. It believes that this this direct line of communication with the insurance regulator has helped promote consumers and insurance providers understanding of China's requirements for the insurance industry. Moreover, the Shanxi CIRC implemented policies to help promote electronic insurance policy premium payments to help reduce policyholders and insurers' ability to use illegally gotten funds to purchase insurance products and to prevent misallocation of insurance premium payments. Furthermore, the Shanxi CIRC noted the success of the online auto insurance information platform it has created that is allowing the Shanxi auto insurance market to become more efficient. Finally, the Shanxi CIRC noted that it felt like its effort to promote arbitration for auto insurance claims because of the experiment it has been running in Taiyuan city. This experiment created a arbitration commission for auto insurance disputes that the Shanxi CIRC believes has helped provide an efficient low cost way to resolve auto insurance claims.

Overall, the Shanxi Provincial CIRC considers this transparency project to be a great success, and therefore, there is a possibility that other provincial level insurance regulatory authorities or even the central government insurance regulatory authority could also implement similar projects to enhance the stability and growth in that province.

If you would like more details on the Shanxi CIRC's transparency project please contact us. Or if you would like more information on some of the policies that the Shanxi CIRC implemented that required insurers providers in Shanxi to adjust their internal policies or disclose additional information please contact us.

The information contained in this article is available at: http://www.sinoins.com/news/101215/55637.html

It establishes that after a foreign insurance institution has received approval from the China Insurance Regulatory Commission to open a foreign representive office the instituion has 90 days to register the representive office with the State Administration of Industry and Commerce. Failure to properly register a representative office or failure to adhere to the Chinese government's requirements for the activities that a foreign representative office can engage in will result in a fine of up to RMB 500,000 ($76,000 US dollars) being levied against the representive office, and this illegal activity could hinder a foreign insurance institution's ability to expand its activities in the Chinese market in the future.

If you have any questions about your representive office's registration and the scope of activities it can engage in within China please contact us immediately.

If you would like detailed information on the China Insurance Regulatory Commission's approval and registration requirements to set up a foreign representative office please contact us.