Measures for the Administration of Foreign Insurance Institutions' Representative Offices in China

 2018-05-19  33


Measures for the Administration of Foreign Insurance Institutions' Representative Offices in China

  • Area of Law Insurance
  • Level of Authority Departmental Rules
  • Date issued02-13-2018
  • Effective Date02-13-2018
  • Status Effective
  • Issuing Authority China Insurance Regulatory Commission


Measures for the Administration of Foreign Insurance Institutions' Representative Offices in China
(Issued by Order No. 5 [2006] of the China Insurance Regulatory Commission on July 12, 2006, and amended according to the Decision of the China Insurance Regulatory Commission to Amend Four Sets of Rules Including the Detailed Rules for the Implementation of the Regulation of the People's Republic of China on the Administration of Foreign-Funded Insurance Companies on February 13, 2018, by Order No. 4, 2018, CIRC)
Chapter I General Provisions
Article 1 For the purposes of strengthening the administration of foreign insurance institutions' representative offices in China (hereinafter referred to as “representative offices”), and meet the demand for opening China's insurance market to the outside world, these Measures are formulated in accordance with the Insurance Law of the People's Republic of China,
Article 2 The term “foreign insurance institutions” as mentioned in these Measures refers to the insurance companies, reinsurance companies, insurance intermediary institutions, insurance associations and other insurance organizations, which are registered outside the territory of China.
The term “representative office” as mentioned in these Measures refers to the representative offices and general representative offices established by foreign insurance institutions inside the territory of China upon approval, engaging in liaison, market investigations and other similar non-business activities.
The term “chief representative” as mentioned in these Measures refers to the principal responsible person of a representative office. The term “general representative” as mentioned in the present Measures refers to the principal responsible person of a general representative office.
Article 3 A representative office must abide by the laws and regulations of China and the relevant provisions of China Insurance Regulatory Commission (hereinafter referred to as CIRC).
The legal rights and interests of the representative offices shall be under the protection of China law.
Article 4 The CIRC shall, in accordance with the law and upon the authorization of the State Council, perform its supervisory functions towards the representative offices.
The dispatched offices of the CIRC shall, within the scope of authorization of CIRC, conduct daily supervision on the representative offices within their respective jurisdiction on behalf of the CIRC.
Chapter II Application and Establishment
Article 5 A foreign insurance institution that applies for establishing a representative office (hereinafter referred to as the “applicant”) shall meet the following conditions:
(1) Its business operational status is good;
(2)It has been engaged in insurance business for 20 years or more if it has any insurance business, or 20 or more years shall have lapsed since the establishment if it has no insurance business;
(3)It has no record of violation of any law or regulation within 3 years prior to the application date; and
(4) Other prudential conditions prescribed by CIRC.
The phrase “has been engaged in insurance business for 20 years or more” means that the foreign insurance institution has engaged in insurance business for 20 consecutive years or more. The calculation of the time period of a foreign insurance institution's engagement in insurance business shall not be affected if it merges any other institution, or if a new insurance institution is established by combining with any other institution.
The time period of engagement in the insurance business by a subsidiary of a foreign insurance institution shall be calculated from the establishment of this subsidiary.
The time period of engagement in the insurance business by a foreign insurance group corporation shall be calculated from the following two dates, whichever is earlier:
(1)The date on which the group begins to engage in the insurance business; and
(2)The date on which its subsidiary starts to engage in the insurance business.
Article 6 An applicant shall submit the following materials:
(1)A formal application form;
(2)An application letter to the chairman of CIRC, which is signed by the board chairman or general manager;
(3)A photocopy of the business license or lawful certificate for opening the business or registration certificate issued by the relevant competent authority of the country or region where the applicant is located;
(4)The articles of association, a name list of the members of the board of directors, and a name list of the management personnel or main partners;
(5)The annual reports of the 3 years prior to the application date;
(6) The opinions issued by the relevant competent authority of the country or region on the applicant's establishment of the representative office inside the territory of China, or a recommendation letter issued by the industrial association. The opinions or recommendation letter shall state the penalties imposed upon the applicant during the 3 years prior to their/its issuance;
(7)The research report on the feasibility and necessity of the establishment of a representative office;
(8)An authorization to the chief representative, which is signed by the board chairman or general manager;
(9)A declaration of the applicant that the chief representative candidate has no record of penalty due to any serious violation of law or regulation within 3 years prior to the application date;
(10)A resume of the chief representative candidate;
(11)Other documents prescribed by CIRC.
The materials submitted by an applicant shall be authentic and valid.
Article 7 An applicant shall submit the application documents to the CIRC. The CIRC shall handle the applications for the establishment of representative offices in light of the following circumstances, respectively:
(1) If there is any error in the application documents that can be corrected on the spot, it shall permit the applicant to correct such error on the spot;
(2) If the application documents are not complete or are not presented in the statutory form, it shall, either on the spot or within 5 days thereafter, inform the applicant once and for all of the contents to be supplemented, or otherwise it shall be deemed to have accepted the application as of the date of receiving the application documents;
(3) If the application documents are complete and in the statutory form, or the applicant has submitted all the supplemented application documents as required, it shall accept the application.
Whether or not the CIRC accepts an application, it shall issue a written document bearing a special seal and with the date indicated on it.
Article 8 The CIRC shall, according to the prudential principle, examine the application for the establishment of a representative office, and shall make a decision on whether or not to approve it within 20 days after the acceptance date. If it is unable to make such a decision within 20 days, it may extend the time limit by 10 days upon approval of the Chairman of the CIRC, and shall inform the applicant of the reason for extension.
The CIRC shall issue an approval certificate if it decides to approve an application; otherwise, it shall make an explanation in writing.
Article 9 After a representative office obtains an approval document, it shall go through the industrial and commercial registration under relevant provisions.
The representative office shall move into a fixed office within 3 months after it obtains the approval document and shall report the following matters to the CIRC:
(1)The certification for industrial and commercial registration;
(2)The certification for the lawful right to use the office;
(3)The telephone number, fax number and post address of the office; and
(4)The mobile phone number and email address of the chief representative.
If the representative office fails to move into a fixed office site within 3 months, the original approval document shall be automatically invalidated.
Chapter III Supervision and Administration
Article 10 The name of a representative office shall be composed of the following contents in sequence: “the name of the country or region where the foreign insurance institution is located”, “the name of the foreign insurance institution”, “the name of the local city” and the “representative office”; the name of a general representative office shall be composed of the following contents in sequence: “the name of the country or region where the foreign insurance institution is located”, “the name of the foreign insurance institution” and “general representative office in China”.
Article 11 Except for the principal responsible person, the main employees of a representative office shall be referred to as “representatives” or “deputy representatives”.
Article 12 The employees of a representative office shall abide by the laws and regulations of China, be of good conduct, and have no evil records.
Article 13 The general representatives and chief representatives shall have the education background, practicing experience and work ability which are essential for them to perform their duties.
A general representative shall have no less than 8 years of work experience, and a college diploma or above. A chief representative shall have no less than 5 years of work experience, and a college diploma or above.
Where a general representative or chief representative does not have a college diploma or above, he shall have no less than 10 years of insurance practicing experience.
Article 14 There shall be no more than 3 foreign employees in a representative office.
Article 15 No representative office or none of the employees of a representative office may engage or participate in any business activities.
Article 16 A representative office shall have an independent and fixed office and full time employees.
Article 17 No general representative or chief representative may concurrently assume posts in 2 or more representative offices, or concurrently assume a post in any other commercial institution.
Article 18 A general representative or chief representative shall permanently stay in the representative office to be responsible for the routine work. He shall stay in the representative office for no less than accumulatively 240 days each year.
A general representative or chief representative shall not leave the representative office for 30 consecutive days each time. If he leaves the representative office for 14 consecutive days, he shall designate a special person to perform the duties on his behalf, and submit a written report to the local institution dispatched by the CIRC.
Article 19 A representative office shall, by the end of February each year, submit a previous-year work report in duplicate to the CIRC via the institution dispatched by the CIRC.
The work report shall be filled out according to the format as prescribed by the CIRC.
Article 20 A representative office shall, within 6 months after the end of the fiscal year of the foreign insurance institution it represents, submit a previous-year annual report of the foreign insurance institution which it represents to the CIRC and to the local institution dispatched by the CIRC, respectively.
Article 21 Where the foreign insurance institution represented by a representative office is under any of the following circumstances, the representative office shall, within 10 days as of the occurrence of the event, submit a written report to the CIRC, and simultaneously send a copy to the local institution dispatched by the CIRC:
(1) The company's articles of association, registered capital or the registered address is modified;
(2) The foreign insurance institution is split up or merged or its main person-in-charge is changed;
(3) The foreign insurance institution is operating at a heavy loss;
(4) The foreign insurance institution is punished due to violation of any law or regulation;
(5) The relevant competent authority of the country or region where the foreign insurance institution is located takes major supervisory measures against the said institution; or
(6) Other events that severely affect the foreign insurance institution's business.
Article 22 Where a representative office changes its general representative or chief representative, it shall file an application with the CIRC and submit the following materials:
(1)An application letter addressed to the Chairman of the CIRC, which is signed by the chairman of the board of directors or by the general manager of the foreign insurance institution it represents;
(2) An authorization to the general representative candidate or chief representative candidate, which is signed by the chairman of the board of directors or by the general manager of the foreign insurance institution it represents;
(3)The identity certificate, education certificate as well as the resume of the general representative candidate or chief representative candidate; and
(4)Other materials as required by the CIRC.
Article 23 Where a representative office intends to modify its name, it shall file an application with the CIRC and submit the following materials:
(1) An application form for modifying the name;
(2) An application letter addressed to the Chairman of the CIRC, which is signed by the chairman of the board of directors or by the general manager of the foreign insurance institution it represents; and
(3) Other materials as required by the CIRC.
Article 24 A foreign insurance institution which has established 2 or more representative offices within the territory of China may designate one of representative offices as the general representative office, but it shall, in accordance with Article 23 of these Measures, apply to the CIRC for changing the name of this representative office into the general representative office.
If a representative office is changed to the general representative office, the general representative office shall go through industrial and commercial formalities for modifying the registration of the representative office.
Article 25 Where a representative office intends to change its general representative, chief representative, or changes its name, it shall file an application with the CIRC in accordance with these Measures. The CIRC shall, within 20 days after it accepts the application, make a decision of approval or disapproval.
If the CIRC decides to approve it, it shall issue an approval document to the applicant. If it decides to disapprove it, it shall make a written decision and make an explanation.
Article 26 A representative office can only change its office within the administrative area of the city where it is located, and shall, within 5 days after it changes its office, report in writing the following matters to the CIRC and the local institution dispatched by the CIRC:
(1) The certificate for the lawful right to use the new office; and
(2) The telephone number, fax number and post address of the new office.
The “change of office” as mentioned in this Article includes moving, expanding, reducing and increasing an office.
Article 27 Where a representative office is to be cancelled, a written application containing the following matters shall be filed to the CIRC:
(1) An introduction to the representative office to be cancelled; and
(2) A photocopy of the document of the foreign insurance institution on the cancellation of the representative office.
Article 28 Where a representative office changes, increases or reduces its representative, deputy representative or any foreign employee, it shall, within 5 days after the person is changed, added or removed, report to the local institution dispatched by the CIRC, and submit the certificates of identity and education background as well as the resumes of the appointed staff.
Article 29 Where, after the representative office of a foreign insurance institution is cancelled, if the general representative office is the only representative office of this foreign insurance institution in China, the general representative office shall, in accordance with Article 23 of these Measures, file an application with the CIRC for changing itself from a general representative office into a representative office.
Where a general representative office is changed into a representative office upon approval, the representative office shall, within 1 month as of the day when the CIRC approves the change, go through the industrial and commercial formalities for modifying the registration.
Article 30 Where, after a representative office is cancelled, if the foreign insurance institution it represented still has a general representative office, the said general representative office shall be responsible for the unsettled matters. If there is no general representative office, other representative offices of the foreign insurance institution it represented shall be responsible for the unsettled matters. If all the representative offices of the foreign insurance institution it represented have been cancelled, the foreign insurance institution it represented shall be responsible for the unsettled matters.
Article 31 Where necessary, the CIRC or the local institution dispatched by the CIRC may, for the purpose of supervision, interview the general representative or chief representative of the representative office, warn him of the risks and require him to make an explanation about the relevant problems.
Article 32 The CIRC and its dispatched institution shall conduct routine and annual inspections over a representative office.
The routine and annual inspections shall cover:
(1) whether or not the formalities for the modification of the representative office are complete;
(2) whether or not the contents of the application materials are consistent with the actual circumstances;
(3) whether or not the formalities for the appointment or change of the employees of the representative office are complete;
(4) whether or not the representative office engages in business activities; and
(5)other matters which the CIRC or its dispatched institution deems necessary to be inspected.
Chapter IV Legal Liabilities
Article 33 Any representative office established without approval by violating these Measures shall be banned by the CIRC in accordance with the law.
Article 34 Anyone who engages in insurance business activities by violating these Measures shall be punished by the CIRC in accordance with the relevant laws and regulations.
Article 35 Anyone who fails to submit the report or documents required by these Measures shall be ordered to make a correction and be given a warning by the local office dispatched by CIRC. If the circumstance is serious, he shall be fined 1, 000 yuan.
Article 36 Where a representative office engages in insurance business activities by violating these Measures, the directly liable employee of the representative office shall be given a warning by the CIRC. If the circumstance is serious, they shall be fined not more than 5,000 yuan. Where a representative office engages in other business activities by violating these Measures, the directly liable employee of the representative office shall be given a warning by the CIRC. If the circumstance is serious, they shall be fined not more than 1,000 yuan.
Article 37 Where a representative office provides any false information or conceals any important fact, it shall be given a warning.
Article 38 Where a representative office violates other provisions of these Measures, it shall be ordered to make a correction. If it fails to do so, it shall be given a warning.
Article 39 The local institution dispatched by the CIRC shall timely report to the CIRC the information about the punishments given to the representative offices.
If a representative office has been given an administrative sanction by the CIRC or the local institution dispatched by the CIRC for 3 times or more, or if it obtains a huge amount of illegal gains from the business activities in which it engaged or participated and causes any serious consequences, the CIRC may regard the punishments given to the representative office as a prudent condition when the foreign insurance institution, which the said representative office represents, applies for establishing a foreign-funded insurance company in China.
Chapter V. Supplementary Provisions
Article 40 The establishment of a Mainland-based representative office by an insurance institution from Hong Kong, Macao or Taiwan region shall be governed by these Measures.
Article 41 The establishment of China-based representative office by a foreign insurance company upon approval of the CIRC shall be governed by these Measures.
Article 42 The formal application for the establishment of a representative office by a foreign insurance institution, and the application for modifying the name of a representative office of a foreign insurance institution shall be provided by the CIRC.
Article 43 Such phrases as “not less than”, “not more than” and “within” mentioned in these Measures all include the given figure.
Article 44 The materials as required by these Measures shall be in Chinese. If any materials provided by the country or region where a foreign insurance company is located is in a foreign language, they shall be accompanied by a Chinese translation. If there is any discrepancy between the Chinese translation and the text in a foreign language, the Chinese translation shall prevail.
Article 45 The approval and report time limits as mentioned in these Measures refer to working days, excluding holidays.
Article 46 The power to interpret these Measures shall remain with the CIRC.
Article 47 These Measures shall come into force as of August 1, 2006. The Measures for the Administration of Foreign Insurance Institutions' Representative Offices in China promulgated by the CIRC on January 15, 2004 shall be abolished simultaneously.