China scraps foreign ownership cap on insurers, but adds security rule

A review shall be conducted if an investment affects or may affect national security.

The China Banking and Insurance Regulatory Commission (CBIRC) has removed the foreign ownership cap on insurance companies, but has added new security reviews, according to a statement.

The regulator has deleted Article 3 in its rules for foreign-funded insurers which stipulates that foreign ownership shall not exceed 51% of the firm’s total share capital.

It has also scrapped requirements for financial support from foreign investors applying for business licences in China.

On the other hand, the CBIRC has also included a new rule for national security reviews. In it, a foreign investment security review shall be conducted if an investment affects or may affect national security.

Other amendments include requiring foreign insurers to submit a duplicate business licence issued by the country where the insurer is located, and a certificate of compliance to solvency standards issued by the authority of the country or region where the foreign insurer or its main insurance subsidiary is located.