The Chinese government launched the Shanghai Free Trade Zone (FTZ) on 29 September 2013 and said that the insurance sector would play an important role in the FTZ.
It is expected that the present restrictions on foreign shareholding in insurance companies could be relaxed if the insurance company is located in the FTZ and foreign insurers may be permitted to provide a broader range of products to customers in the FTZ.
Nonetheless, it has been speculated that interest rates and other financial regulations will not be completely liberalised in the FTZ. While the Chinese authorities will treat the FTZ as an experimental district to test new operating models, it is not expected to reach the level of Hong Kong as a financial hub.
According to the China Insurance Regulatory Commission, two Shanghai-based insurers, China Pacific Property Insurance and Dazhong Insurance, have obtained approval to set up branches to operate property insurance in the FTZ. Other large general insurers including People's Insurance Company of China and Ping An Insurance may seek to establish branches in the trade zone soon.
For further information on foreign investment in insurance firms in the FTZ, please refer to the article published by Asia Insurance Review on 25 September 2013 here.