A stricter, but more equal game
New measures tighten the administration of investment into the insurance sector, but now foreign participants can expect equal treatment with domestics on shareholding ratio requirements. And for the first time, the new rules address horizontal competition
Issue: July/August 2010
Keywords (click to search):
insurance
Wang Jing
investment
restrictions
Equities are the nerve centre of capital markets. With respect to internal corporate governance, equity administration is focused on the completion of the governance structure and the enhancement of competitiveness. Relating to the external market, equity administration is a battle between capital and equity. The insurance industry in China belongs to sunrise industries with various types of capital: state-owned, local government, civilian, and foreign capital. These industries are eagerly competing against bank capital and securities to enter the insurance market.
In order to strengthen the administration of capital funds, the China Insurance Regulatory Commission (CIRC) has promulgated various bylaws and documents, such as the Tentative Provisions for Investing in the Equity of Insurance Companies (向保险公司投资入股管理暂行规定) and the Circular on Matters Relevant to Regulating the Acceptance of Foreign Equity Investment by Chinese-invested Insurance Companies (关于规范中资保险公司吸收外资参股有关事项的通知).
As the insurance industry rapidly develops, equity transactions are becoming more frequent...
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