Insurance as a transforming force for China real estate

On February 28 2009, the Standing Committee of the 11th National People's Congress of China adopted a substantially amended and revised PRC Insurance Law (中华人民共和国保险法 (修订)). The amended Insurance Law, which became effective on October 1 2009, introduces international best practices to the China insurance industry and attempts to create a regulatory framework to accommodate and guide an industry undergoing rapid transformation. The amended law and related implementing regulations have been closely watched by participants inside and outside the insurance industry. The real estate industry, in particular, has been captivated by the opportunities and challenges created by China's evolving insurance laws and regulations. Under the amended Insurance Law, insurance companies are now expressly allowed to invest in real estate for the first time, thereby creating a potentially new, large and influential institutional player in the Chinese real estate landscape. There are important amendments relevant to the real estate industry as well as key areas where future implementing policies of regulatory authorities will shape the future scope and impact of insurance companies on the real estate market in China.