Circular of the China Insurance Regulatory Commission on Issuing the Guidance on Articles of Association for Insurance Companies

Circular of the China Insurance Regulatory Commission on Issuing the Guidance on Articles of Association for Insurance Companies

Bao Jian Fa [2017] No.36

April 24, 2017

All insurance group (holding) companies, insurance companies and insurance asset management companies,

To further standardize the formulation of the articles of association for insurance companies and promote the companies concerned to constantly improve their governance structure based on the articles of association, the China Insurance Regulatory Commission (the "CIRC") has formulated in accordance with the Insurance Law of the People's Republic of China, the Company Law of the People's Republic of China and other laws and regulations, the Guidance on Articles of Association for Insurance Companies, which is hereby issued to you for your compliance.

From now on, those who apply for establishment and acceptance for the purpose of operation of an insurance company shall draft or revise their draft articles of association (the "Articles of Association") in accordance with the Guidance on Articles of Association for Insurance Companies. Other insurance companies shall accordingly modify their Articles of Association before the end of 2017.

Guidance on Articles of Association for Insurance Companies

[Notes: (1) Guidance on Articles of Association for Insurance Companies (the "Guidance") makes clear that the Articles of Association of insurance companies shall include at least the following chapters: general provisions, business purpose and scope; registered capital and shares, shareholders and the general meeting, board of directors, board of supervisors, general manager and other senior officers, financial and accounting system, profit distribution and auditing, basic management systems, notices and announcements, merger, division, capital increase and decrease, dissolution and liquidation, special corporate governance matters, amendments to the Articles of Association and supplementary provisions. (2) The Guidance applies to joint-stock insurance group (holding) companies, insurance companies and insurance asset management companies; for companies of other organizational forms, the Guidance will apply mutatis mutandis. Listed insurance companies shall also comply with the related provisions of the China Securities Regulatory Commission on the articles of association of listed companies. (3) The Guidance only sets out essential clauses of the Articles of Association of insurance companies. (4) Subject to the laws and regulations and the requirements hereof, a company can add to its Articles of Association other contents beyond those as stipulated in the Guidance that meet its practical needs and can also adjust or change the contents and the order thereof. If such is the case, the company shall explain the additions or modifications to the Guidance when submitting its materials with respect to the Articles of Association to the CIRC for review. (5) The right to interpret the Guidance is vested in the CIRC. (6) The Guidance will take effect as of the date of issue.]

Article 1 A company shall state clearly in the following ways in the text leading into the body of its Articles of Association:

No.	Formulation of the Articles of Association	Resolved on:	Meeting name	Approval number of the CIRC
1	Formulation of the Articles of Association	Date	Inaugural meeting	[]
2	1st amendment	Date	[]	[]
-	-	-	-

 

Chapter I General Provisions

Article 2 The Articles of Association shall indicate according to the Company Law and other laws and regulations as well as regulatory provisions, the following basic matters of a company, which are required to be consistent with those licensed by the CIRC:
1. name
2. domicile
3. organizational form
4. operation approval document number and business license issue date
[Note: this does not apply to the Articles of Association submitted before operations.]
5. business term
6. legal representative

Article 3 In the Articles of Association, it is mandatory to contain: "A company's directors, supervisors and senior officers shall have job qualifications approved by the CIRC" and "A company must abide by the laws and regulations, implement the unified national financial insurance guidelines and policies, and accept the supervision and management of the CIRC".

Article 4 The Articles of Association shall set forth the following provisions providing for the effectiveness thereof:
"The Articles of Association are a document legally binding upon the Company's organizations and behaviors and the rights and obligations between the Company and its shareholders, and those between shareholders and shareholders when the Articles of Association enter into force and upon the Company and its shareholders, directors, supervisors and senior officers.
The Articles of Association will control any and all inconsistencies with the originator agreement, the shareholders' investment agreement or other shareholder agreements, if any."

Chapter II Business Purpose and Scope

Article 5 The Articles of Association shall include terms on the company's business purpose and scope, with the business scope being consistent with that as licensed by the CIRC.

Chapter III Registered Capital and Shares

Section 1 Registered capital and shares issuance

Article 6 The Articles of Association shall cover the latest registered capital and total number of shares of the company concerned.

Article 7 The Articles of Association shall have a list of promoters and equity structure.
1. The model of the list of promoters is as follows:
"The Company's registered capital is RMB [] upon incorporation and the promoters' information is listed as follows:

No.	Name	Investment amount	Shares subscribed (shares)	Proportion in total shares	Way of investment	Invested on
		(RMB/Yuan)
1
2
-	-	-	-	-	-	-
Total

"
[Note: The list of promoters shall state in detail the information on the promoters, including their full names, number of shares they have subscribed for, and shareholding ratios. The list of promoters shall record and make clear the promoters who have fully transferred their shares.]
2. The model of the list of equity structures is as follows:
"The Company's equity structure is as follows:

No.	Shareholders	Number of shares (shares)	Proportion in total shares
1
2
-	-	-
Total

Remark: "
[Note: (1) The list of equity structures shall state in detail the information on the shares, including total number of shares, full names of shareholders, number of shares they hold, and shareholding ratios. (2) for shareholders who have ever transferred shares, it is required to indicate in the remark column the past share transfers, including the number of shares transferred, the party, transfer date and the CIRC's approval document No. or the approval document No. of the Company for the purpose of registration. (3) Shareholders who have transferred their holdings of shares will not be listed in the list of equity structures but in the remark column thereof, and records of those shareholders' shareholdings shall be kept. (4) Where the Company has gone listed, its list of equity structures shall state the shareholdings of holders of restrictive shares, including the full names of shareholders, number of shares they hold, shareholding ratios and the lock-up periods of such restrictive shares. (5) If the list of equity structures records many contents, it can be included in the Articles of Association as an annex. (6) In the event that the list of promoters and the list of equity structures record completely the same contents, they can be consolidated.]

Section 2 Share increase and decrease

Article 8 Articles of Association must state that "To increase or reduce its registered capital, the Company shall abide by the Company Law, the relevant provisions of the CIRC and other regulatory agencies and the procedures set out herein".

Article 9 According to the actual circumstances, the Company can make clear in its Articles of Association whether existing shareholders are granted the priority to subscribe for the capital according to their shareholding ratios with respect to capital increases of the Company.

Article 10 The Articles of Association shall contain: "To increase or reduce its registered capital, the Company shall submit to the CIRC for approval, and handle registration procedures for, the changes, with the registration authorities in accordance with the law".

Article 11 The Company shall make clear in its Articles of Association such circumstances as increase of registered capital, purchase of its shares, methods thereof and others according to the Company Law and the relevant provisions of the CIRC and other regulatory agencies.

Section 3 Shares transfer

Article 12 The Articles of Association must state that "The Company's shares can be transferred according to the law to the extent that the relevant provisions of the CIRC and the related regulatory agencies and the agreements hereof shall be met".

Article 13 The Articles of Association shall set forth that "Shareholders shall handle relevant formalities for their transfer of shares in accordance with the law, and are required to report the same to the Company in written form within 15 working days from the date when the share transfer agreement is signed".
[Note: Other provisions of the pertinent laws and regulations on the share transfer of shareholders of listed insurance companies, if any, shall prevail.]

Article 14 The Articles of Association shall state that "The Company may not provide loans, guarantees and other forms of financial supports to its directors, supervisors or senior officers for their purchase of the Company's shares".

Article 15 The Articles of Association shall specify the period during which the Company's shares cannot be transferred and the related contents shall comply with the laws, regulations and regulatory provisions.

Chapter IV Shareholders and the General Meeting

Section 1 Shareholders

Article 16 The Articles of Association shall include the rights to which shareholders are entitled.
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