The China Insurance Regulatory Commission ("CIRC") released on July 29 the Regulatory Rules on the Solvency of Insurance Companies No. X: Classified Supervision (Comprehensive Risk Rating) (Second Draft for Comment) for comments from all insurance companies. The deadline for submitting comments is August 11, 2014.
The Draft sets forth provisions concerning the evaluation content, category and methods for classified supervision, supervision policies and measures, and operation mechanism. As to the evaluation content, the operating risk, strategic risk, reputation risk, liquidity risk and other risks that are difficult to be quantified as the minimum capital requirements of an insurance company shall be evaluated under the classified supervision, and then the solvency risk of the insurance company shall be subject to the comprehensive rating by considering the company's solvency adequacy rate as an index.