Circular of the State Administration of Foreign Exchange on Issuing the Guidelines for the Foreign Exchange Control of Insurance Business

Circular of the State Administration of Foreign Exchange on Issuing the Guidelines for the Foreign Exchange Control of Insurance Business

Hui Fa [2015] No.6

January 19, 2015

The branches or administrative offices of the State Administration of Foreign Exchange in all provinces, autonomous regions and municipalities directly under the Central Government, branches of the State Administration of Foreign Exchange in Shenzhen City, Dalian City, Qingdao City, Xiamen City and Ningbo City, all insurance group (holding) companies, insurance companies, insurance assets management companies and all designated Chinese-funded foreign exchange banks,

With a view to further streamlining administration and delegating power to the lower levels and improving foreign exchange control of insurance business, the State Administration of Foreign Exchange has formulated the Guidelines for the Foreign Exchange Control of Insurance Business (hereinafter referred to as the "Guidelines", see the Appendix hereto), which shall officially come into force as of March 1, 2015. Relevant document is hereby issued to you for your implementation in compliance, and relevant issues are notified as below:

Article 1 About the follow-up work after the delegation of administrative licensing examination authority. If the Foreign Exchange Business Operation Permit obtained by insurance group (holding) companies and insurance companies is in the validity period, they may continuously use it until the maturity date. If any of them needs to continuously operate foreign exchange insurance business, it may apply for the qualification for operating the foreign exchange business in accordance with the Guidelines at least 30 working days before the maturity date of the Foreign Exchange Business Operation Permit; if any of them does not continuously operate the foreign exchange insurance business, it may return the Foreign Exchange Business Operation Permit to the local branch or administrative office of the State Administration of Foreign Exchange, and then, the foreign exchange insurance business will be terminated automatically.

Article 2 Before issue of the Circular of the State Administration of Foreign Exchange on Issuing the Guidelines for the Foreign Exchange Control of Insurance Business (hereinafter referred to as the "Circular"), insurance group (holding) companies, insurance companies and insurance assets management companies, which have not gone through the registration of direct foreign exchange investments, shall supplementarily go through foreign exchange registration formalities with local administrations of foreign exchange or handling banks in accordance with the relevant provisions in time.

Article 3 In order to facilitate ex post administration and monitoring, all branches or administrative offices shall fully check and verify foreign exchange accounts of insurance group (holding) companies, insurance companies and insurance assets management companies within their jurisdictions to ensure that all account information submitted are truthful as per provisions.

Article 4 After receiving the Circular, all branches or administrative offices shall promptly forward the same to central sub-branches (sub-branches), local commercial banks and foreign banks within their jurisdictions. After receiving the Circular, insurance companies and designated Chinese-funded foreign exchange banks shall promptly forward the same to branches thereof.

Article 5 After the implementation of the Circular, if any previous provision runs counter to the Circular, the Circular shall prevail.

In the event of any problem during the implementation of the document, please feed back the problem to the Current Account Management Department of the State Administration of Foreign Exchange in a timely manner.

It is hereby notified.

Guidelines for the Foreign Exchange Control of Insurance Business

Chapter I General Provisions

Article 1 For the purpose of improving the foreign exchange control of insurance business, the Guidelines for the Foreign Exchange Control of Insurance Business (hereinafter referred to as the "Guidelines") are formulated in accordance with laws and regulations including the Administrative Regulations of the People's Republic of China on Foreign Exchange (hereinafter referred to as the "Regulations").

Article 2 The State Administration of Foreign Exchange (hereinafter referred to as the "SAFE") and branches and sub-branches thereof (hereinafter referred to as the "administrations of foreign exchange") shall, in accordance with the Guidelines, supervise and administer the business such as the market access and exit of foreign exchange business, foreign exchange accounts, cross-border foreign exchange receipts and payments, domestic foreign exchange transfer, and foreign exchange settlement and sales of insurance group (holding) companies, insurance companies and insurance assets management companies (hereinafter referred to as the "insurance institutions").

Article 3 Insurance institutions and branches thereof shall observe the relevant national laws and regulations in conducting foreign exchange business and the business such as cross-border foreign exchange receipts and payments, domestic foreign exchange transfer, and foreign exchange settlement and sales, and establish a perfect internal management system.

Chapter II Market Access and Exit Administration of Foreign Exchange Insurance Business

Article 4 To operate the foreign exchange insurance business, insurance companies and branches thereof shall meet the following conditions:
1. being registered lawfully in China upon approval;
2. qualified for operating the insurance business; and
3. having a complete internal management system corresponding to the foreign exchange insurance business.

Article 5 The operation of the foreign exchange insurance business by insurance companies shall be approved by local branches or administrative offices of the SAFE (hereinafter referred to as the "local SAFE branches").
Branches of insurance companies qualified for operating the foreign exchange insurance business may operate, change or terminate the foreign exchange insurance business as of the date of obtaining the internal written authorization of insurance companies or provincial branches thereof.
Provincial branches of insurance companies shall report to local SAFE branches the list of branches at the same or lower level, which apply for the operation, change or termination of the foreign exchange insurance business in the preceding quarter, within ten working days after the end of each quarter as required.

Article 6 Foreign exchange insurance business refers to the insurance business denominated in a foreign currency or denominated in Renminbi but settled in a foreign currency as conducted by insurance companies and branches thereof in China, and conforming to provisions in Articles 7 to 9 hereof.
Insurance companies and branches thereof shall operate part or all of the following foreign exchange insurance business in accordance with provisions:
1. foreign exchange property insurance;
2. foreign exchange personal insurance;
3. foreign exchange reinsurance; and
4. other foreign exchange insurance business provided by regulations.
As for any insurance business not conforming to the Guidelines, insurance companies and branches thereof shall conduct the denomination and settlement of the relevant insurance contract in Renminbi in China.

Article 7 Foreign exchange property insurance business shall conform to any of the following circumstances:
1. the insurance object is the property and the relevant interests outside the People's Republic of China;
2. the insurance object is the property and the relevant interests transferred inside and outside the People's Republic of China;
3. the insurance object or underwriting risk is, in whole or in part, the liability insurance, credit guarantee insurance or other insurance existing or occurring outside the People's Republic of China;
4.
　　......