Reform of Chinese insurance law

After over four years of consultation and discussion, on 28 February 2009 the long- awaited amendment to China’s Insurance Act was promulgated by the Standing Committee of the National People’s Congress of the People’s Republic of China. The amendment embraces various changes relating to both the insurance contract law and the regulation of insurance business in China. The new Act will come to force on 1 October later this year. The impacts of the amendment remain to be seen. The legislation is discussed by Wenhao Han of Barlow Lyde & Gilbert LLP.

The history of China’s modern insurance legislation is relatively short. China’s Insurance Act was promulgated in 1995 and it regulates both insurance contracts and insurance business in China. After China’s accession to the World Trade Organisation (WTO), the Act was subsequently amended in 2002 so as to bring it into line with China’s various new WTO commitments. The amendments in 2002 mainly related to the regulation of insurance business rather than to the insurance contract law and they were relatively limited. Within a year of the 2002 amendments, the China Insurance Regulatory Commission (CIRC) started a further round of consultations. The new Act is the result of these consultations.