Recently, the China Insurance Regulatory Commission ("CIRC") has formulated and issued the Guidance on Articles of Association for Insurance Companies (the "Guidance").
The Guidance is applicable to all insurance group (controlling) companies, insurance companies, and insurance asset management companies that are of joint stock nature. Insurance companies incorporated in other organizational forms shall act with reference to such Guidance. The Guidance provides that an insurance company's articles of association shall at least include 14 chapters, such as the general provisions, business purposes and scope, registered capital and shares, shareholders and shareholders' general meetings, and its basic corporate governance systems. Additionally, the Guidance specifies shareholders' rights and obligations, requiring insurance companies to specify detailed rules for shareholders to nominate "directors, supervisors and senior management personnel"; it also perfects the mechanism for shareholders' general meetings and board of directors to grant authorization, providing that the legal powers of a shareholders' general meeting shall not be delegated by means of authorization to the board of directors or any other body or individual to exercise on its behalf. Furthermore, the Guidance improves the voting mechanism for resolutions, clearly stating that where a single shareholder holds over 50% of a company' total stocks, it is obligatory to adopt the cumulative voting on the election of directors and supervisors. Finally, the Guidance optimizes relevant rules on independent directors and provides for special issues on corporate governance.