NEW CIRC RULE WORKS IN FAVOUR OF ESTABLISHED INSURERS

Overseas companies seeking to set up representative offices in China will need to have “at least 20 years of continuous operations in the insurance industry”, according to a new regulation on the China Insurance Regulatory Commission’s web site. Wang Guojun, insurance professor at the University of International Business and Economics, said that “compared with the original rule which has no requirement for foreign insurers’ years of experience, the newly added threshold shows the regulatory authority’s commitment to prevent potential risks and strengthen management of foreign insurance institutions”. Earlier versions contained no reference to tenure. Akihiro Matsumoto of Sumitomo Life said that the new rule would “be a big challenge for those small and medium-sized foreign insurers that are eager to cash in on the huge Chinese insurance market”. The previous requirement was that applicants for representative offices should be able to demonstrate a good operating performance and that the company have no outstanding regulatory issues in the last three years. The regulator is soliciting public responses to the draft until March 9.