Circular of the China Insurance Regulatory Commission on Further Strengthening the Check and Acceptance for the Business Commencement of Insurance Companies

Circular of the China Insurance Regulatory Commission on Further Strengthening the Check and Acceptance for the Business Commencement of Insurance Companies

Bao Jian Fa [2017] No.51

June 22, 2017

The preparatory groups of all the Chinese-funded insurance companies,

In order to regulate the preparation activities of insurance companies, tighten up business commencement acceptance standards, optimize corporate governance structure from the source and effectively prevent operational risks, the relevant matters are hereby notified as follow:

I. Strengthen the examination of the preparations for incorporating insurance companies
1. Strengthen the examination of the implementation of the preparation plans. The preparatory groups shall promote the preparations and various business commencement work of insurance companies in compliance with the regulatory requirements. The chairman of the board of directors and general manager to be appointed are required to present the work plan in respect of corporate governance, senior management team and business planning to the China Insurance Regulatory Commission ("CIRC") prior to the convening of the inaugural conference of an insurance company and the CIRC shall conduct a comprehensive assessment. If the actual preparation work of the insurance company is inconsistent with the statements in the preparatory application materials or severely deviates from regulatory guidance, the CIRC shall order them to make rectifications within a prescribed time limit.
2. Strengthen the examination of the effectiveness of the articles of association of insurance companies. The articles of association of insurance companies shall comply with the Company Law, Insurance Law and other laws and regulations as well as the relevant requirements of the Guidelines on the Articles of Association of Insurance Companies and other regulatory systems, specify the institutional arrangement in key processes of corporate governance, such as the directors' selection, check and balance mechanism, the authorization mechanism and the accountability mechanism, make arrangements before the occurrence of special risk issues such as corporate governance failure, governance deadlock, major business or financial crisis and establish rectification procedures.
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