Circular of the China Banking and Insurance Regulatory Commission on Issuing the Measures for the Regulatory Assessment of the Corporate Governance of Banks and Insurance Institutions (for Trial Implementation)
Circular of the China Banking and Insurance Regulatory Commission on Issuing the Measures for the Regulatory Assessment of the Corporate Governance of Banks and Insurance Institutions (for Trial Implementation)
Circular of the China Banking and Insurance Regulatory Commission on Issuing the Measures for the Regulatory Assessment of the Corporate Governance of Banks and Insurance Institutions (for Trial Implementation)
Yin Bao Jian Fa [2019] No.43
November 25, 2019
All banking and insurance regulatory bureaus, large banks, joint-stock banks and foreign banks, as well as all insurance group (holding) companies, insurance companies and mutual insurance societies,
With a view to further strengthening the regulation of the corporate governance of banks and insurance institutions and effectively improving the effectiveness of corporate governance, the Measures for the Regulatory Assessment of Corporate Governance of Banks and Insurance Institutions (for Trial Implementation) are hereby issued to you for your compliance and implementation.
Measures for the Regulatory Assessment of the Corporate Governance of Banks and Insurance Institutions (for Trial Implementation)
Chapter I General Provisions
Article 1 These Measures are formulated in accordance with laws and regulations including the Company Law of the People's Republic of China, the Law of the People's Republic of China on Commercial Banks, the Law of the People's Republic of China on Banking Supervision and Administration and the Insurance Law of the People's Republic of China as well as regulatory provisions with a view to pushing forward banks and insurance institutions to improve the effectiveness of their corporate governance, and boosting the long-term, stable and sound development of the banking and insurance industries.
Article 2 For the purpose of these Measures, the regulatory assessment of corporate governance means that the China Banking and Insurance Regulatory Commission (hereinafter referred to as the "CBIRC") and its local offices conduct judgment, evaluation and classification in terms of corporate governance level and risk profile of banks and insurance institutions in accordance with the law, and legally implement classified regulation based on the assessment results.
Article 3 These Measures shall apply to commercial banks and commercial insurance institutions legally established within the territory of the People's Republic of China, including: large state-owned commercial banks, joint-stock commercial banks, urban commercial banks, private banks, rural commercial banks, foreign banks, insurance group (holding) companies, insurance companies, mutual insurance societies and captive insurance companies.
Article 4 The regulatory assessment of the corporate governance of banks and insurance institutions shall follow the principles of legality and compliance, objectiveness and fairness, uniform standards and clear priorities, etc.
Chapter II Assessment Contents and Methods
Article 5 The regulatory assessment of the corporate governance of banks and insurance institutions shall mainly include the following contents: leadership of the Communist Party of China (the "CPC"), governance over shareholders, governance over the board of directors, governance over the board of supervisors and senior management, internal control of risks, governance over affiliated transactions, market constraints, and governance over other stakeholders, among others.
Article 6 Regulatory assessment of corporate governance shall include three steps: compliance evaluation, effectiveness evaluation, and downgrading due to major issues.
Compliance evaluation: with the maximum score of 100 points and the aim mainly to check whether the corporate governance of a bank or an insurance institution conforms to laws, regulations and regulatory provisions, the competent regulatory department will give a score upon evaluation respectively of the relevant indicators item by item.
Effectiveness evaluation: with the focus laid on checking the actual effects of the corporate governance mechanism of a bank or an insurance institution and the main attention paid to prominent problems and risks, the competent regulatory department will take points off in light of the effectiveness evaluation indicators based on the compliance evaluation; and may add extra points in terms of the good practice of the bank or insurance institution improving the effectiveness of corporate governance.
Downgrading due to major issues: where an institution has any major deficiency or even failure in its corporate governance, the competent regulatory department will downgrade the preceding two comprehensive scores and their corresponding Assessment-based Levels to form the result of regulatory assessment of corporate governance.
In the case of any problem with the compliance indicators or effectiveness indicators, which fails to be rectified for several consecutive years, more points may be taken off as the case may be; in the case of failure to effect the rectification in the second year, points may be taken off at twice the index score; in the case of failure to effect the rectification in the third year, points may be taken off at four times the index score; and in the case of failure in the fourth year, points may be taken off at eight times the index score, and so on.
Article 7 The total score of regulatory assessment of corporate governance shall be 100 points, and the Assessment-based Level shall be divided into five levels: above 90 points, Level A; above 80 points but below 90 points, Level B; above 70 points but below 80 points, Level C; above 60 points but below 70 points, Level D; below 60 points, Level E.
Article 8 Whoever falls under any of the following circumstances may be directly graded as level E:
1.
......
Yin Bao Jian Fa [2019] No.43
November 25, 2019
All banking and insurance regulatory bureaus, large banks, joint-stock banks and foreign banks, as well as all insurance group (holding) companies, insurance companies and mutual insurance societies,
With a view to further strengthening the regulation of the corporate governance of banks and insurance institutions and effectively improving the effectiveness of corporate governance, the Measures for the Regulatory Assessment of Corporate Governance of Banks and Insurance Institutions (for Trial Implementation) are hereby issued to you for your compliance and implementation.
Measures for the Regulatory Assessment of the Corporate Governance of Banks and Insurance Institutions (for Trial Implementation)
Chapter I General Provisions
Article 1 These Measures are formulated in accordance with laws and regulations including the Company Law of the People's Republic of China, the Law of the People's Republic of China on Commercial Banks, the Law of the People's Republic of China on Banking Supervision and Administration and the Insurance Law of the People's Republic of China as well as regulatory provisions with a view to pushing forward banks and insurance institutions to improve the effectiveness of their corporate governance, and boosting the long-term, stable and sound development of the banking and insurance industries.
Article 2 For the purpose of these Measures, the regulatory assessment of corporate governance means that the China Banking and Insurance Regulatory Commission (hereinafter referred to as the "CBIRC") and its local offices conduct judgment, evaluation and classification in terms of corporate governance level and risk profile of banks and insurance institutions in accordance with the law, and legally implement classified regulation based on the assessment results.
Article 3 These Measures shall apply to commercial banks and commercial insurance institutions legally established within the territory of the People's Republic of China, including: large state-owned commercial banks, joint-stock commercial banks, urban commercial banks, private banks, rural commercial banks, foreign banks, insurance group (holding) companies, insurance companies, mutual insurance societies and captive insurance companies.
Article 4 The regulatory assessment of the corporate governance of banks and insurance institutions shall follow the principles of legality and compliance, objectiveness and fairness, uniform standards and clear priorities, etc.
Chapter II Assessment Contents and Methods
Article 5 The regulatory assessment of the corporate governance of banks and insurance institutions shall mainly include the following contents: leadership of the Communist Party of China (the "CPC"), governance over shareholders, governance over the board of directors, governance over the board of supervisors and senior management, internal control of risks, governance over affiliated transactions, market constraints, and governance over other stakeholders, among others.
Article 6 Regulatory assessment of corporate governance shall include three steps: compliance evaluation, effectiveness evaluation, and downgrading due to major issues.
Compliance evaluation: with the maximum score of 100 points and the aim mainly to check whether the corporate governance of a bank or an insurance institution conforms to laws, regulations and regulatory provisions, the competent regulatory department will give a score upon evaluation respectively of the relevant indicators item by item.
Effectiveness evaluation: with the focus laid on checking the actual effects of the corporate governance mechanism of a bank or an insurance institution and the main attention paid to prominent problems and risks, the competent regulatory department will take points off in light of the effectiveness evaluation indicators based on the compliance evaluation; and may add extra points in terms of the good practice of the bank or insurance institution improving the effectiveness of corporate governance.
Downgrading due to major issues: where an institution has any major deficiency or even failure in its corporate governance, the competent regulatory department will downgrade the preceding two comprehensive scores and their corresponding Assessment-based Levels to form the result of regulatory assessment of corporate governance.
In the case of any problem with the compliance indicators or effectiveness indicators, which fails to be rectified for several consecutive years, more points may be taken off as the case may be; in the case of failure to effect the rectification in the second year, points may be taken off at twice the index score; in the case of failure to effect the rectification in the third year, points may be taken off at four times the index score; and in the case of failure in the fourth year, points may be taken off at eight times the index score, and so on.
Article 7 The total score of regulatory assessment of corporate governance shall be 100 points, and the Assessment-based Level shall be divided into five levels: above 90 points, Level A; above 80 points but below 90 points, Level B; above 70 points but below 80 points, Level C; above 60 points but below 70 points, Level D; below 60 points, Level E.
Article 8 Whoever falls under any of the following circumstances may be directly graded as level E:
1.
......