The China Banking and Insurance Regulatory Commission (CBIRC) issued the Rules on Insurance Asset Management Company (New Rules) after extensive consultation on 05 April 2022. These will come into force on 01 September 2022.
Here are some key takeaways related to this development:
- The New Rules abolish restrictions on the shareholding ratio of foreign investors in insurance asset management companies. It also cancels the requirement that the total shares of an insurance asset management company held by domestic insurance companies shall not be lower than 75% in the Old Rules, and further clarify that the total shareholding ratio of domestic and foreign insurance group (holding) companies and insurance companies in insurance asset management companies shall exceed 50%.
- Unified conditions and restrictions are set for all types of shareholders. According to the New Rules, the shareholders of insurance asset management companies are classified into domestic shareholders and foreign shareholders. The shareholders of insurance asset management companies should also meet certain conditions.
- The New Rules clearly stipulate that the main promoters, controlling shareholders and actual controllers of insurance asset management companies shall adhere to the long-term investment concept and make a written commitment to hold the equity of insurance asset management companies for not less than five years. During the holding period, they shall not pledge or establish a trust over the equity, unless otherwise specified by the CBIRC.
- Article 15 of the New Rules stipulates that there shall be no more than two insurance asset management companies invested by the same investor and its related parties and persons acting in concert, among which there is at most one insurance asset management company directly, indirectly or jointly controlled, unless approved by the CBIRC. In other words, an investor and its related parties and persons acting in concert can invest in at most two insurance asset management companies, and at most one insurance asset management company can be controlled.
- The New Rules also specified the types of subsidiaries that insurance asset management companies can establish.
The New Rules included requirements around corporate governance, risk management and optimization of business operations, to strengthen the independence and risk management capabilities of insurance asset management companies, reinforce the institutional constraints for corporate governance supervision comprehensively, and maintain the safety of insurance funds and other long-term funds effectively.
You can read the full alert – China: Interpretation of new administration rules for insurance asset management companies – on Baker McKenzie’s InsightPlus.