Following publication by the China Insurance Regulatory Commission (CIRC) of the Credit Guaranty Insurance Business Draft Discussion Paper (Discussion Paper) in June 2017 (see our newsletter of 12 July), the finalised Credit Guaranty Insurance Business Regulations (Regulations) were duly promulgated by CIRC on 11 July 2017. The key differences contained in the Regulations, compared with the Discussion Paper, are:
- Insurance companies are prohibited from underwriting any credit/guaranty policies in respect of any unlisted bond issue (the Discussion Paper had contemplated allowing policies to be underwritten in respect of unlisted bond issues where the issuer held a AA+ rating or better); and
- For insurers wishing to underwrite credit/guaranty policies in respect of listed bond issues, then in addition to a requirement that the bond issuer must hold a rating of AA+ or better, the bond itself must be AA+ rated or better.
These Regulations are effective 11 July 2017, and remain in force for 3 years.