Partial Amendment to Regulations Governing Insurance Enterprises Conducting Foreign Investment

07/01/2013

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On 3 May 2013, the Financial Supervisory Commission (FSC) partially amended the Regulations Governing Insurance Enterprises Conducting Foreign Investment, effective on the same date. Main points of the amendment are as follows:
1.	specified the calculation method regarding the lump sum for items in specific investment asset classes meeting certain rating levels assigned by foreign credit rating agencies and expanded the basis for calculating the quota for insurance enterprises' investment in foreign securities from "paid-in capital and capital surplus" to "shareholder equity";
2.	permitted qualified insurance enterprises to invest in corporate bonds rated by foreign credit rating agencies at the levels of BBB, BBB- and BB+ or equivalent level and specified the investment quota;
3.	added that qualified insurance enterprises may acquire real estate abroad and in Mainland China area through real estate investment enterprises and invest in the investment property in Mainland China area; stipulated applicable internal operating systems and procedures and specified qualifications for such real estate investment enterprises, foreign real estate appraisal services providers and foreign property management companies for carrying out such investment activities and the mandatory disclosure information during the investment period;
4.	permitted qualified insurance enterprises to invest in bonds issued in the Mainland China area and specified the qualifications for insurance enterprises to conduct such investment; specified that insurance enterprises may invest in RMB-denominated securities issued outside of Mainland China pursuant to the regulations on investment in other foreign exchange-denominated securities;
5.	stipulated that insurance enterprises which have been approved by the competent authorities to sell life insurance products other than investment-oriented insurance products and meet specified qualifications may submit an application, together with a business development plan and related documents, for approval that such investment amount does not count against the amount ceiling on foreign investment set by the competent authorities; and
6.	increased the number of foreign custodian institutes to five from two with which insurance enterprises may place their foreign investment assets for custody.