Solvency Regulation

Original Language Title: 保险公司偿付能力管理规定

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Solvency regulation

    (July 10, 2008 China insurance regulatory Commission announced 2008 1th come into force on September 1, 2008) Chapter I General provisions

    First in order to strengthen the solvency of insurance companies, safeguard the interests of insured persons, promote the healthy, stable and sustainable development of the insurance industry, according to the People's Republic of China Insurance Act, these provisions are formulated.

    Insurance company referred to in the provisions of article, refers to the commercial insurance set up by an insurance company and a branch of a foreign insurance company.

    Solvency in these rules refers to the insurance company's ability to repay debt.

    Third insurance company should have its risks and business to adapt to the size of capital, ensure solvency ratios of not less than 100%.

    Solvency ratio the capital adequacy ratio, refers to the actual capital and insurance companies minimum capital ratios.

    The fourth insurance companies solvency management system should be established, strengthened capital constraints to ensure the company's solvency. Insurance companies solvency Management Board of Directors and management of the company is responsible for. Branch of a foreign insurance company's management is responsible for the solvency of the company management.

    Insurance companies and the branch of a foreign insurance company shall designate a senior manager responsible for the company's solvency management services.

    Fifth China insurance regulatory Committee (hereinafter referred to as the China insurance regulatory Commission) established based on risk, dynamic solvency standards and regulatory mechanisms, to evaluate the solvency of insurance companies and supervision and inspection, and to take regulatory measures.

    Chapter II solvency assessment

    Sixth insurance company shall, according to the China insurance regulatory Commission solvency reporting rules on reparation for solvency assessment on a regular basis, calculate the minimum capital and real capital, dynamic solvency test.

    Solvency of insurance companies should be based on risk assessment.

    Seventh insurance companies minimum capital refers to insurance companies for asset risks, underwriting risks, such as risk-adverse impact on solvency, according to the China insurance regulatory Commission and should have a capital.

    The eighth section of the actual capital, refers to the recognized balance of assets and ranking liabilities. Approving the asset is in the assessment of the solvency of insurance companies, according to China insurance regulatory Commission identified assets.

    Recognized assets list law shall be applicable.

    Approving the debt is in the assessment of the solvency of insurance companies, according to China insurance regulatory Commission recognized the debt.

    Nineth provisions of an insurance company shall, according to the China insurance regulatory Commission to dynamic solvency test under different scenarios within a specified time in the future solvency of trend forecasting and evaluation.

    Tenth article has a number of branches of foreign insurance companies in China should be combined to assess all the overall solvency of branches.

    Chapter III solvency reports

    11th the solvency of the insurance company shall, according to the China insurance regulatory Commission developed reporting rules on reparation and related provisions to prepare and submit reports on their solvency, ensure that information is true, accurate, complete and in compliance.

    Solvency reports including annual reports, quarterly and ad hoc reports.

    12th report of the Board of Directors and management of an insurance company solvency content authenticity, accuracy, completeness and compliance responsibility.

    The 13th after the end of each fiscal year, an insurance company shall, in accordance with the provisions of the CIRC, and submit annual audited solvency report approved by the Board of Directors.

    14th annual report on the solvency of insurance companies should include:

    (A) the Board of Directors and management;

    (Ii) external independent advice;

    (C) basic information;

    (Iv) management's discussion and analysis;

    (E) Note the internal risk management;

    (Vi) minimum capital;

    (G) physical capital;

    (H) the dynamic solvency test.

    15th after the end of each quarter, an insurance company shall, in accordance with the provisions of the China insurance regulatory Commission to submit quarterly report of solvency.

    The 16th periodic report, the insurance company solvency deficiency occurs at any point of the day, the insurance company Board of Directors and management should be found within 5 working days from the date of reporting to the CIRC, and take effective measures to improve the company's solvency.

    17th insurance companies have significant adverse effects on the solvency of the following matters shall, within 5 working days from the date of the matter to the CIRC report:

    (A) major losses;

    (B) major payments or for major litigation, mass surrender;

    (C) subsidiaries and joint ventures, financial crises or taken over by the financial regulator;

    (Iv) owing to solvency problems of the branch of a foreign insurance corporation subject to administrative penalties, mandatory regulatory measures or filed for bankruptcy protection;

    (E) the parent company or taken over by the financial regulator the financial crisis;

    (Vi) material assets by the judiciary to freeze major administrative penalties or other administrative bodies;

    (VII) significant adverse effect on the solvency of other matters.

    18th in China has a number of branches of the branch of a foreign insurance company shall designate a company in China as the main reporting agencies, responsible for carrying out the provisions of the reporting responsibilities.

    19th insurance companies invested overseas insurers submitted to local insurance regulatory solvency report prepared according to local regulations, the report shall also be submitted to the China insurance regulatory Commission.

    20th Circ in accordance with regulatory needs, adjusted solvency reports of insurance companies submitted frequency.

    21st insurance company shall, in accordance with national laws, administrative regulations and the provisions of the China insurance regulatory Commission, public disclosure of the solvency situation.

    The fourth chapter solvency management 22nd integrated risk management of insurance companies, factors that affect the company's ability to pay should be included in the solvency of the company management system.

    Insurance companies solvency management system include:

    (A) asset management;

    (B) debt management;

    (C) asset-liability management;

    (D) capital management.

    23rd insurance companies shall establish effective asset management systems and mechanisms, key to identify, prevent and remove from concentration risk, credit risk, liquidity risk, market risk, asset risk:

    (A) strengthening underwriting, reinsurance, payment, investment, financing and other aspects of the monitoring of financial flows;

    (B) establish an effective fund management mechanism, according to its own nature and the internal organisation of the investment business, decision, action, managed, assessment separate and competing investment management system;

    (C) to strengthen the equity of subsidiaries, joint ventures and associated enterprises management, risk management, and internal management of related party transactions, risk transfer and transfer within the monitoring group;

    (D) strengthening the management of physical assets such as fixed assets, establish effective asset segregation and authorization system;

    (E) establishing credit risk management system and mechanism, strengthen debt investments, reinsurance reserve receivable credit risk, such as a centralized asset management.

    24th insurance company shall focus on the following areas identify, prevent and resolve risks underwriting risks, security risks, financing and other types of liability risks:

    (A) clear pricing, sales, underwriting, nuclear claims, reinsurance, key control links of control procedures, reducing underwriting risk;

    (B) the establishment and improvement of evaluation system of reserve liabilities, ensure the accuracy and adequacy of reserve liabilities assessed;

    (C) financial management systems and mechanisms, clear funding risk control procedures;

    (D) strict security procedures other than insurance business, comply with laws, administrative regulations and the relevant provisions of the China insurance regulatory Commission, according to a guaranteed credit and solvency, prudent risk control measures and follow up in a timely manner.

    25th insurance company shall strengthen asset liability management, established asset and liability management systems and mechanisms, to identify, prevent and resolve in a timely manner in terms of assets and liabilities, interest rates, currency mismatch risks and other risks.

    26th insurance company shall establish a sound management system, improve corporate governance and timely identification, prevention and solution of corporate governance risk and operational risk.

    27th insurance company capital constraint mechanism should be established, in the formulation of development strategies, planning, design, investment, taking into account effects on solvency.

    28th an insurance company should be established and their development strategies and adapt to business planning capital replenishment mechanisms, improve profitability through financing and maintain the solvency of the company.

    29th solvency ratios above 150% the insurance companies, should be based on the lower of the following two as the basis for profit distribution:

    (A) the distributable profits determined in accordance with accounting standards for business enterprises;

    (B) the solvency margin remaining comprehensive report established by the rules on reparation benefits.

    30th of an insurance company shall establish a Board of Directors and management are responsible for the solvency of management mechanisms, identifying relevant institutions and staff in asset management, liability management, asset-liability management, capital management, the responsibilities, rights and solvency management procedures and specific measures.

    31st insurance companies solvency management training system should be established, on the solvency of the company managers and other stakeholders for solvency and compliance training on a regular basis.

    32nd insurance companies solvency management effectiveness management should periodically evaluate and improve, and the Board of directors or the shareholders (large) report.

    The fifth chapter solvency supervision

    33rd article of China insurance regulatory Commission on solvency supervision and inspection monitoring and non-spot supervision methods.

    The 34th China insurance regulatory Commission review of the solvency of insurance companies to submit reports.

    The CIRC may authorize intermediaries to the solvency of insurance companies to submit reports and review relevant information.

    Article 35th of China insurance regulatory Commission at the end of each quarter, based on the solvency of insurance companies to submit reports and other information on the solvency of insurance companies for analysis.

    Article 36th Circ regular or irregular conduct inspections over the insurance companies solvency management of the following:

    (A) the compliance and effectiveness of the management of payment capacity;

    (B) the solvency assessment of compliance and authenticity;

    (C) the regulatory measures on the implementation of the Circ;

    (D) other aspects of the China insurance regulatory Commission required.

    37th CIRC under solvency situation of insurance companies are divided into the following three categories, classified supervision:

    (A) the lack of companies, insurers with solvency ratios below 100%;

    (B) adequate class I companies, solvency ratios are between 100% and 150% insurance company;

    (C) adequate class II company, means the insurance company solvency ratios above 150%.

    Circ will the insurance companies, dynamic solvency testing results as a basis for regulatory measures.

    Article 38th for lack of such companies, CIRC shall distinguish different situations, take one or more of the following measures:

    (A) order to increase capital or limiting dividends to shareholders;

    (B) limit the level of remuneration of Directors and senior management staff and professional consumption levels;

    (C) restrictions on commercial advertising;

    (D) limiting additional branches, limiting the scope of business, shall be ordered to stop new business, order the transfer of insurance business or be ordered to go through separate business;

    (E) order to auction the assets or limit the acquisition of fixed assets;

    (F) limited investment channels;

    (G) adjustment of owners and managers;

    (H) take over;

    (IX) other regulatory measures deemed necessary by the Circ.

    39th Circ may require adequate class I submit and implement plans to prevent insolvency.

    40th sufficient class ⅰ company class ⅱ Division company of material and adequate solvency risk, the CIRC may require its rectification or take the necessary regulatory measures.

    41st in accordance with this article provides for the establishment and implementation of insurance companies solvency management system, the CIRC may require the rectification, in serious cases, regulatory measures can be taken and shall be subject to administrative penalties.

    42nd Circ for domestic branches of foreign insurance companies solvency assessment of the merger, the solvency regulation measures applicable in all branches.

    Article 43rd Agency of the China insurance regulatory Commission under the China insurance regulatory Commission to authorize, in the solvency Regulation shall perform the following duties:

    (A) the insurance company branches of the internal risk management, regulatory compliance and effective supervision and inspection;

    (B) to branches of insurance companies solvency regulation based data such as financial information integrity and authenticity of conducting supervision and inspection;

    (C) prevent and resolve insurance company branches of market risk, prevent significant market risk into risk of solvency;

    (D) implementation of the China insurance regulatory Commission on insurance companies to take regulatory measures to ensure strict implementation of the monitoring measures at the branch level;

    (E) identify, monitor, prevent and resolve major solvency risks within its jurisdiction;

    (Vi) other solvency duties authorized by the China insurance regulatory Commission.

    The sixth chapter supplementary articles

    44th insurance solvency regulation applies to the provisions otherwise provided by laws, administrative regulations, or the China insurance regulatory Commission, to apply its provisions.

    45th article of the CIRC is responsible for the interpretation and amendment. 46th article of the regulations come into force on September 1, 2008. Index of the solvency of insurance companies and supervision regulations (insurance [2003]1) repealed simultaneously.

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