Circular of the China Banking and Insurance Regulatory Commission on Matters concerning the Optimization of Regulation of the Investment Management Capacity of Insurance Institutions
Circular of the China Banking and Insurance Regulatory Commission on Matters concerning the Optimization of Regulation of the Investment Management Capacity of Insurance Institutions
Circular of the China Banking and Insurance Regulatory Commission on Matters concerning the Optimization of Regulation of the Investment Management Capacity of Insurance Institutions
Yin Bao Jian Fa [2020] No.45
September 30, 2020
All insurance group (holding) companies, insurance companies and insurance asset management companies,
With a view to continuing to streamline administration and delegate power and further deepening the market-oriented reform on use of insurance funds, in accordance with the Administrative Measures for the Use of Insurance Funds (Order of the China Insurance Regulatory Commission [2018] No.1) and pertinent provisions, the relevant matters concerning the optimization of regulation of the investment management capacity of insurance group (holding) companies, insurance companies and insurance asset management companies (hereinafter collectively referred to as "insurance institutions") are hereby notified as follows:
I. Investment management capacity is the premise and foundation for an insurance institution to conduct bond, stock, equity, real estate and other investment management business. An insurance institution conducting various investment management business independently or on a commission basis shall have the corresponding investment management capacity.
II. An insurance institution's investment management capacity involves the following seven categories: 1. credit risk management capacity; 2. stock investment management capacity; 3. equity investment management capacity; 4. real estate investment management capacity; 5. derivative use management capacity; 6. debt investment plan product management capacity; and 7. equity investment plan product management capacity.
To be specific, Items 1 to 5 apply to insurance group (holding) companies and insurance companies, and Items 1, 2, 5, 6 and 7 apply to insurance asset management institutions.
Insurance asset management institutions with debt investment plan product management capacity may provide real estate investment consulting service and technical support; and those with equity investment plan product management capacity may provide equity investment consulting service and technical support.
An insurance institution intending to purchase self-use real estate, invest in corporate equity of insurance type or set up any subsidiary engaging in special asset management business shall perform the corresponding procedures in accordance with relevant regulatory provisions without being subject to no requirement for investment management capacity.
III. The management and supervision of an insurance institution's investment management capacity shall be conducted by the mode of combing the company's self-assessment, information disclosure and on-going regulation.
IV. An insurance institution shall, prior to conducting relevant investment management business, effectively carry out research and demonstration, self-assessment and information disclosure in line with the investment management capacity standards prescribed herein, to ensure that its personnel qualification, institutional construction, system construction, etc. comply with the capacity standards.
V. The professional committee performing audit duties under the board of directors of an insurance institution shall, at least on a yearly basis, review the building of the insurance institution's investment management capacity and put forward opinions and improvement suggestions to the board of directors. The compliance management department of the insurance institution shall specifically be responsible for the compliance assessment of its investment management capacity.
VI. An insurance institution shall, on an on-going basis, strengthen the building of its investment management capacity, dynamically assess the up-to-standard and compliance status of its various investment management capacities, and strictly be prohibited from increasing any relevant investment management business in case of failure to comply with the investment management capacity standards.
An insurance institution shall, where its investment management capacity fails to meet the regulatory requirements on an on-going basis or falls under any other circumstance, develop a plan in response to changes in major matters concerning its investment management capacity.
VII. An insurance institution shall, in terms of each investment management capacity, specify at least two risk owners including one administrative responsible person and one professional responsible person, for which the qualification conditions, management requirements, etc., shall be subject to relevant regulatory provisions.
VIII. An insurance group (holding) company or an insurance company shall proactively and promptly disclose the building and self-assessment of its investment management capacity on the official websites of the company and the Insurance Association of China.
An insurance asset management institution shall proactively and promptly disclose the building and self-assessment of its investment management capacity on the official websites of the company and the Insurance Asset Management Association of China.
IX. The content on the building and self-assessment of its investment management capacity publicly disclosed by an insurance institution shall cover various elements of relevant capacity standards; if it involves personnel qualification, each professional's specific qualification, working experience, etc. shall be specified; if it involves institutional construction, each corresponding institution name and document number shall be specified; if it involves the process mechanism, overall framework and division of labor in various links, management rule name and information on the responsible person shall be specified; and if it involves the construction of information systems, such information as the system name and main functions shall be specified.
An insurance institution shall, in line with the format and content requirements of relevant guidelines on disclosure of information on use of insurance funds, effectively disclose information on various investment management capacity risk owners, with the disclosure frequency and manner, etc., subject to the requirements on disclosure of information on the investment management capacity.
X. An insurance institution's disclosure of information on its investment management capacity shall include first disclosure, semi-annual disclosure and disclosure of major matters.
XI. An insurance institution conducting relevant investment management business for the first time shall publicly disclose relevant information on the building and self-assessment of its corresponding investment management capacity at least ten days in advance; and in the case of carrying out relevant derivative transactions for the first time, a self-assessment shall also be reported to the China Banking and Insurance Regulatory Commission (“CBIRC”) at least 15 days in advance.
XII. An insurance institution shall conduct self-assessment of compliance of the building of various investment management capacities at least semi-annually, and publicly disclose the building and self-assessment of its investment management capacity prior to January 31 and July 31 of each year, respectively.
XIII. An insurance institution shall, in case of change to main personnel of its investment team, change in its main institution and process, major system failure or abnormality, any other emergency or force majeure circumstance, resulting in failure of its investment management capacity to meet the capacity standards, report the relevant situation to the CBIRC and make public disclosure thereof within ten days after the change.
XIV. An insurance institution engaging an independent third-party audit institution to carry out external audit work shall include the building, self-assessment and information disclosure of its investment management capacity in the audit and report the audit as part of the content of the annual special audit report on internal control over the use of insurance funds to the CBIRC as required.
XV. The CBIRC shall, on an on-going basis, track and regulate the building and self-assessment of each insurance institution's investment management capacity through off-site monitoring, on-site investigation and inspection, or by other means.
XVI. The Insurance Association of China and the Insurance Asset Management Association of China shall, under the guidance of the CBIRC, strengthen the self-regulatory management of each insurance institution's disclosure of information on its investment management capacity and report to the CBIRC without delay if insurance institutions' information disclosure is found to be delayed or incomplete.
XVII. Where an insurance institution falls under any of such circumstances as failure to make information disclosure promptly, authentically, accurately or completely, the CBIRC would take such regulatory measures as conducting a regulatory talk and issuing a risk warning letter to order it to make corrections within a prescribed time limit; if the insurance institution fails to make the corrections within the prescribed time limit, or falls under any of such circumstances as fabricating and providing false information, conducting corresponding investment business without investment management capacity, conducting relevant investment business without performing the information disclosure and reporting procedures, or increasing relevant investment when its investment management capacity fails to meet the requirements on an on-going basis, the CBIRC would impose an administrative punishment thereon in accordance with laws and regulations.
XVIII.
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Yin Bao Jian Fa [2020] No.45
September 30, 2020
All insurance group (holding) companies, insurance companies and insurance asset management companies,
With a view to continuing to streamline administration and delegate power and further deepening the market-oriented reform on use of insurance funds, in accordance with the Administrative Measures for the Use of Insurance Funds (Order of the China Insurance Regulatory Commission [2018] No.1) and pertinent provisions, the relevant matters concerning the optimization of regulation of the investment management capacity of insurance group (holding) companies, insurance companies and insurance asset management companies (hereinafter collectively referred to as "insurance institutions") are hereby notified as follows:
I. Investment management capacity is the premise and foundation for an insurance institution to conduct bond, stock, equity, real estate and other investment management business. An insurance institution conducting various investment management business independently or on a commission basis shall have the corresponding investment management capacity.
II. An insurance institution's investment management capacity involves the following seven categories: 1. credit risk management capacity; 2. stock investment management capacity; 3. equity investment management capacity; 4. real estate investment management capacity; 5. derivative use management capacity; 6. debt investment plan product management capacity; and 7. equity investment plan product management capacity.
To be specific, Items 1 to 5 apply to insurance group (holding) companies and insurance companies, and Items 1, 2, 5, 6 and 7 apply to insurance asset management institutions.
Insurance asset management institutions with debt investment plan product management capacity may provide real estate investment consulting service and technical support; and those with equity investment plan product management capacity may provide equity investment consulting service and technical support.
An insurance institution intending to purchase self-use real estate, invest in corporate equity of insurance type or set up any subsidiary engaging in special asset management business shall perform the corresponding procedures in accordance with relevant regulatory provisions without being subject to no requirement for investment management capacity.
III. The management and supervision of an insurance institution's investment management capacity shall be conducted by the mode of combing the company's self-assessment, information disclosure and on-going regulation.
IV. An insurance institution shall, prior to conducting relevant investment management business, effectively carry out research and demonstration, self-assessment and information disclosure in line with the investment management capacity standards prescribed herein, to ensure that its personnel qualification, institutional construction, system construction, etc. comply with the capacity standards.
V. The professional committee performing audit duties under the board of directors of an insurance institution shall, at least on a yearly basis, review the building of the insurance institution's investment management capacity and put forward opinions and improvement suggestions to the board of directors. The compliance management department of the insurance institution shall specifically be responsible for the compliance assessment of its investment management capacity.
VI. An insurance institution shall, on an on-going basis, strengthen the building of its investment management capacity, dynamically assess the up-to-standard and compliance status of its various investment management capacities, and strictly be prohibited from increasing any relevant investment management business in case of failure to comply with the investment management capacity standards.
An insurance institution shall, where its investment management capacity fails to meet the regulatory requirements on an on-going basis or falls under any other circumstance, develop a plan in response to changes in major matters concerning its investment management capacity.
VII. An insurance institution shall, in terms of each investment management capacity, specify at least two risk owners including one administrative responsible person and one professional responsible person, for which the qualification conditions, management requirements, etc., shall be subject to relevant regulatory provisions.
VIII. An insurance group (holding) company or an insurance company shall proactively and promptly disclose the building and self-assessment of its investment management capacity on the official websites of the company and the Insurance Association of China.
An insurance asset management institution shall proactively and promptly disclose the building and self-assessment of its investment management capacity on the official websites of the company and the Insurance Asset Management Association of China.
IX. The content on the building and self-assessment of its investment management capacity publicly disclosed by an insurance institution shall cover various elements of relevant capacity standards; if it involves personnel qualification, each professional's specific qualification, working experience, etc. shall be specified; if it involves institutional construction, each corresponding institution name and document number shall be specified; if it involves the process mechanism, overall framework and division of labor in various links, management rule name and information on the responsible person shall be specified; and if it involves the construction of information systems, such information as the system name and main functions shall be specified.
An insurance institution shall, in line with the format and content requirements of relevant guidelines on disclosure of information on use of insurance funds, effectively disclose information on various investment management capacity risk owners, with the disclosure frequency and manner, etc., subject to the requirements on disclosure of information on the investment management capacity.
X. An insurance institution's disclosure of information on its investment management capacity shall include first disclosure, semi-annual disclosure and disclosure of major matters.
XI. An insurance institution conducting relevant investment management business for the first time shall publicly disclose relevant information on the building and self-assessment of its corresponding investment management capacity at least ten days in advance; and in the case of carrying out relevant derivative transactions for the first time, a self-assessment shall also be reported to the China Banking and Insurance Regulatory Commission (“CBIRC”) at least 15 days in advance.
XII. An insurance institution shall conduct self-assessment of compliance of the building of various investment management capacities at least semi-annually, and publicly disclose the building and self-assessment of its investment management capacity prior to January 31 and July 31 of each year, respectively.
XIII. An insurance institution shall, in case of change to main personnel of its investment team, change in its main institution and process, major system failure or abnormality, any other emergency or force majeure circumstance, resulting in failure of its investment management capacity to meet the capacity standards, report the relevant situation to the CBIRC and make public disclosure thereof within ten days after the change.
XIV. An insurance institution engaging an independent third-party audit institution to carry out external audit work shall include the building, self-assessment and information disclosure of its investment management capacity in the audit and report the audit as part of the content of the annual special audit report on internal control over the use of insurance funds to the CBIRC as required.
XV. The CBIRC shall, on an on-going basis, track and regulate the building and self-assessment of each insurance institution's investment management capacity through off-site monitoring, on-site investigation and inspection, or by other means.
XVI. The Insurance Association of China and the Insurance Asset Management Association of China shall, under the guidance of the CBIRC, strengthen the self-regulatory management of each insurance institution's disclosure of information on its investment management capacity and report to the CBIRC without delay if insurance institutions' information disclosure is found to be delayed or incomplete.
XVII. Where an insurance institution falls under any of such circumstances as failure to make information disclosure promptly, authentically, accurately or completely, the CBIRC would take such regulatory measures as conducting a regulatory talk and issuing a risk warning letter to order it to make corrections within a prescribed time limit; if the insurance institution fails to make the corrections within the prescribed time limit, or falls under any of such circumstances as fabricating and providing false information, conducting corresponding investment business without investment management capacity, conducting relevant investment business without performing the information disclosure and reporting procedures, or increasing relevant investment when its investment management capacity fails to meet the requirements on an on-going basis, the CBIRC would impose an administrative punishment thereon in accordance with laws and regulations.
XVIII.
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