6.1 Introduction

Insurance institutions that intend to engage in insurance activities in China must be licensed before they can operate. The requirements and procedures for licensing must be clear, objective, and public and must be consistently applied.1 Licensing contributes to efficiency and stability in the insurance sector. Strict conditions governing the formal approval through licensing of insurance legal entities are necessary to protect consumers. The relevant licensing criteria should be applied to prospective entrants consistently to promote a level playing field at point of admission to the insurance sector. Licensing requirements and procedures should not be used inappropriately to prevent or unduly delay access to the market.2