On 9 April 2013, the CIRC promulgated the Notice on Relevant Issues regarding Article 4 ("Notice") of the Administrative Measures on Equity Interest in Insurance Companies (“Measures”). Article 4 sets the maximum shareholding of any one shareholder in a domestic insurance company at 20% which percentage cannot be exceeded unless the shareholder meets the requirements under Article 15 and the Notice (set out below). A domestic insurance company is defined as an insurance company in which the aggregate shareholding of its foreign shareholders is less than 25%.

Requirements under Article 15 of the Measures

The applicant must:

  • be capable of making continuous capital contribution, and in each of the three most recent fiscal years the applicant must have been profitmaking;
  • have strong financial capability, with net assets of RMB200 million or more;
  • be of a good creditworthiness and a leading company in its industry.

Additional requirements under the Notice

The applicant must also:

  • have total assets of RMB10 billion or more at the end of the immediately proceeding year;
  • have a net asset value of not less than 30% of the value of total assets;
  • the value of long-term equity investments (including the investment in insurance companies) being no higher than its net asset value;
  • have invested in the domestic insurance company for three years or more;
  • not have acted in violation of the laws and regulations regarding acts of insurance companies’ shareholders.

Source: CIRC