The State Administration of Foreign Exchange has recently issued the Guidelines for the Foreign Exchange Control of Insurance Business (the "Guidelines") for official implementation as of March 1, 2015.
The Guidelines delegate the authority to approve the access and exit of insurance institutions with legal person status from the foreign exchange insurance market, as well as the conduct of conversion of funds between Renminbi and foreign currencies by such institutions in the said market. The Guidelines cancel the pre-approval requirement for the access and exit of insurance institutions at the provincial level or below from the foreign exchange insurance, as well as the requirement for review every three years of the foreign exchange insurance business qualifications of insurance institutions.
The Guidelines also lay down the work rules for cross-border insurance, the use of foreign exchange funds, fiduciary management of foreign exchange funds, and other business operations, and provides regulations for the insurance companies' use of foreign exchange accounts. The Guidelines emphasize that the insurance companies' accounts for the applications of foreign exchange funds shall be used exclusively for the applications of foreign exchange funds and shall not be used for foreign exchange settlement or daily receipts and payments.