Newsletter
Insurance enterprises are allowed to engage in RMB-denominated non-investment-linked life insurance business
Insurance enterprises are allowed to engage in RMB-denominated non-investment-linked life insurance business by the Financial Supervisory Commission (FSC) on 20 December 2013. Main points of related measures are as follows:
1. Criteria for New Types of Life Insurance Products as amended and reported by The Life Insurance Association of The Republic of China: it is newly added that the first RMB-denominated non-investment-linked life insurance product of each insurance enterprise shall be reviewed and approved by FSC.
2. Amendment to the Regulations Governing Qualifications on Engagement in Foreign Currency Denominated Non-Investment-Linked Life Insurance Business by Life Insurance Enterprises: stipulated the asset deployment plan and items to be included in the execution method which are required for the application for approval; in addition, an insurance enterprise selling such insurance product must have an RBC ratio reaching 200% and shall comply with the ceiling amount stipulated by the competent authority.
3. In consideration of the limited RMB investment channels, stipulated the calculation method of the ceiling amount of sale of RMB-denominated non-investment-linked life insurance products by insurance enterprises: if an insurance enterprise would like to reinsure the RMB-denominated non-investment-linked insurance business, only partial reinsurance is allowed; in addition, 50% of the amount of partial reinsurance would not be counted toward the aforementioned ceiling.
4. Stipulated the liability reserve rate applicable to RMB-denominated non-investment-linked life insurance products; in addition, to prevent insurance enterprises from selling short-term RMB-denominated non-investment-linked life insurance products which are similar to RMB term deposits, the premium payment term of such products shall be at least 4 (inclusive) years initially once the applicable rules come into force.