On 7 March 2018, the China Regulatory Insurance Commission (‘CIRC’) issued its amended Insurer Shareholder Regulations (‘Regulations’). Two rounds of public discussion drafts of the Regulations had available for public consultation 29 December 2016 through 31 January 2017, and again 20 July 2017 through 21 August 2017. The Regulations amend and enhance earlier versions of the original ‘Insurer Shareholder Regulations” and its related rules and regulations. The Regulations’ key content is:
- Neither a single shareholder; nor a group of related shareholders; nor a group of shareholders acting-in-concert (related or otherwise), may hold, individually in the case of a single shareholder or collectively otherwise, more than one third of the registered (share) capital of a CIRC-authorised insurance company (‘Insurer’).
- Insurer shareholders are delineated into one of four shareholding categories – either “Financial Shareholder Class I” (less than 5% holding); or “Financial Shareholder Class II" (5% or more, but less than 15% holding); or “Strategic Shareholder” (15% or more, but less than one third holding); or “Controlling Shareholder” (one third or more holding).
- The Regulations establish a ‘Negative List” framework to regulate the circumstances in which entities are not permitted to become an Insurer shareholder (including Controlling Shareholders).
The Regulations strictly and only apply to Domestic-Invested Insurers (‘DII’), and as such the existing regulated cap for aggregated foreign share ownership of DIIs remains unchanged at sub-25%.
The Regulations will become effective 10 April 2018.