Effective from February 2002, the Administration of Foreign-funded Insurance Companies Regulations (FFIC Regulations) liberalizes foreign access to China's insurance sector. The types of foreign-funded insurance companies that may be approved by the CIRC for establishment in China include:
(i) an equity joint venture insurance company;
(ii) a WFOE insurance company; and
(iii) a foreign insurance company branch within China.
Foreign insurance service suppliers may not establish PRC companies limited by shares. Foreign-funded insurance brokerages and agencies may only take the form of limited liability companies. Insurance brokerages may be established as either a limited liability company or as a company limited by shares. Insurance agencies may be a partnership, a limited liability company or a company limited by shares. Foreign-funded insurance companies will be able to conduct open or closed securities investment fund management businesses on China's exchanges. The securities investment fund management business has a 33% cap on foreign equity upon ascension, rising to 49% within three years.
The FFIC Regulations implement several of China's WTO insurance sector commitments. Market access conditions for foreign insurance suppliers track those found in China's services schedule, as described above. Minimum registered capital of equity joint venture and wholly foreign-owned companies as well as the minimum operating capital of foreign-funded branches is RMB200 million (USD24 million). For an insurance brokerage established as a limited liability company, minimum capitalization is RMB10 million (USD1.2 million), while for a similar insurance agency company the registered capital must be at least RMB500,000 (USD60 million).
