Chapter 1 General Provisions

Article 1 The present Regulation has been enacted for the purpose of satisfying the demand of opening to the outside world and developing economy, strengthening and improving the supervision and administration of insurance companies with foreign investment, and promoting the healthy development of the insurance industry.

Article 2 The term "insurance company with foreign investment" as mentioned in the present Regulation shall refer to any of the following insurance companies established upon approval according to relevant laws and administrative regulations and does business within the territory of the People's Republic of China;

1. An insurance company established by foreign insurance companies and Chinese companies or enterprises within the territory of China for joint business operations (hereinafter referred to as joint insurance companies);
2. A foreign capital insurance company invested and established by foreign insurance companies for business operations within the territory of China (hereinafter referred to as solely-funded insurance companies);
3. A branch company of a foreign insurance company established within the territory of China (hereinafter referred to as branches of foreign insurance companies) Article 3 Insurance companies with foreign investment shall abide by the laws and regulations of China and may not infringe upon the social public interests of China.

The lawful business operations, rights and interests of the insurance companies with foreign investment shall be subject to the protection of Chinese law.

Article 4 The China Insurance Regulatory Committee (hereinafter referred to as CIRC) shall be responsible for the supervision and regulation of insurance companies with foreign investment. The detached offices of the CIRC shall, on the basis of the authorization of the CIRC, be responsible for the routine supervision and regulation of the insurance companies with foreign investment within their respective jurisdictions.

Chapter 2 Establishment and Registration

Article 5 The establishment of a insurance company with foreign investment shall be subject to the approval of the CIRC.

The areas where insurance companies with foreign investment may be established shall be decided by the CIRC according to relevant provisions.

Article 6 For the establishment of insurance companies with foreign investment engaging in personal insurance and property insurance, the form of establishment and proportion of foreign investment shall be determined by the CIRC according to relevant provisions.

Article 7 The minimum limit of registered capital of a joint insurance company and solely funded insurance company shall be 200 million yuan or freely exchangeable currencies of identical value; the minimum limit of the registered capital shall be virtually contributed capital. The contributions of insurance companies with foreign investment shall be freely exchangeable currencies.

The head office of a insurance company with foreign investment shall gratuitously allot to the branch companies freely exchangeable currencies at an amount of no less than 200 million yuan in value as operating funds.

The CIRC may, according to the scope of business and business scale of the insurance company with foreign investment, raise the level of the minimum limit of registered capital or operating funds of the insurance company with foreign investment.

Article 8 A foreign insurance company that applies for establishing a insurance company with foreign investment shall meet the following conditions:

1. It shall have been engaged in the insurance business for more than 30 years;
2. It shall be more than two years since a representative office was established within the territory of China;
3. The total assets at the end of the year prior to the application for establishment shall be no less than 5 billion US dollars;
4. The country or region where the foreign insurance company is situated shall have sound systems for the regulation of insurance and the foreign insurance company shall have already been under the effective regulation of the relevant authority of the country or region;
5. It shall satisfy the solvency standard of the country or region;
6. It shall obtained the approval of relevant authorities of the country or region for the establishment.
7. It shall satisfy other conditions discreetness as provided by the CIRC.

Article 9 To establish a insurance company with foreign investment, the applicant shall file a written application to the CIRC and submit the following materials:

1. An application signed by the legal representative of the applicant; if the application is for establishing a joint insurance company, it shall be signed by the legal representatives of the parties to the joint insurance company;
2. The business license (duplicate) issued by the relevant authority of the country or region, a certificate that proves its meeting the solvency standards and the opinions about the application;
3. The articles of incorporation of the foreign applicant and the annual statements the recent 3 years;
4. Relevant materials of the Chinese applicant if the application is for establishing a joint insurance company;
5. A feasibility study report and plan of preparatory establishment of the company to be established;
6. The names, resumes of the persons to be in charge of the company to be established and certificate of appointment;
7. Other materials as provided by the CIRC.

Article 10 The CIRC shall make preliminary examinations over the application for establishing a insurance company with foreign investment and shall decide, within 6 months after receiving the complete set of application documents, whether to accept the application or not. If it decides to accept the application, it shall issue a formal application form to the applicant; if it decides not to accept, it shall inform the applicant in writing and state the reasons.

Article 11 The applicant shall complete the preparatory establishment within one year after receiving the formal application form. If it can justify its failure to complete the preparatory work within the time limit, the time limit may be extended for three months upon the approval of the CIRC. If it fails to complete the preparatory work within the extended period, the acceptance decision made by the CIRC shall be automatically invalidated. After the completion of the preparatory work, the applicant shall fill in the application form and submit it together with the following documents to the CIRC for examination and approval:

1. A report for preparatory establish;
2. The articles of incorporation of the company to be established;
3. The contributors and amount of contributions thereof of the company to be established;
4. A certification of verification of capital issued by a legal appraisal institution;
5. A letter of attorney issued to the person-in-charge of the company to be established;
6. Names and resumes of the senior management personnel and certificates of appointment of the company to be established;
7. Plans of the company to be established during the future three years and plans of reinsurance;
8. The insurance clauses and premiums of the types of insurance as well as a specification of the calculation of liability reserve funds of the company to be established within the territory of China;
9. Materials of the site of business and other facilities relating to business operation of the company to be established;
10. In the case of establishing branch companies by a foreign insurance company, a letter of guarantee of being responsible for the taxes and debts of the branch companies issued by the head office;
11. In the case of establishing a joint insurance company, the contracts for joint business operation;
12. Other documents as required by the CIRC.

Article 12 The CIRC shall, within 60 days after receiving the complete formal application materials for establishing a insurance company with foreign investment, decide whether to approve or disapprove. If approval is to be granted, it shall issue a License of Engaging in the Insurance Business; if disapproval is to be granted, it shall inform the applicant in written and state the reasons.

If it is approved to establish a insurance company with foreign investment, the applicant shall, on the basis of the License of Engaging in the Insurance Business, apply to the administrative department of industry and commerce for registration and for a business license.

Article 13 The insurance company with foreign investment shall, after being established, draw a caution money at the rate of 20% of the total amount of registered capital or operating funds and deposit it in a bank designated by the CIRC. The caution money may not be used for any purpose other than clearing the debts of the company under liquidation.

Article 14 The establishment of branches within the territory of China by a enterprise with foreign investment shall be subject to the examination and approval of the CIRC.

Chapter 3 Scope of Business

Article 15 A insurance company with foreign investment may, according to the scope of business as verified by the CIRC, engage in all or part of the types of insurance business as mentioned below:

1. Property insurance, including indemnity insurance, liability insurance, credit insurance, etc;
2. Personal insurance, including life insurance, health insurance, accidental injury insurance, etc.

A insurance company with foreign investment may, on the basis of verification by the CIRC according to relevant provisions, engage in large commercial risk insurance, all-inclusive policy insurance, etc. with the verified scope of business.

Article 16 A same insurance company with foreign investment may not be engaged in the property insurance and personal insurance at the same time.

Article 17 A insurance company with foreign investment may be engaged in the following reinsurance of the insurance businesses as mentioned in Article 15 of the present Regulation:

1. outward reinsurance;
2. inward reinsurance.

Article 18 The specific scope of business, geographic area of business and the range of clients shall be subject to the verification of the CIRC according to relevant provisions. A insurance company with foreign investment may be engaged in the insurance business within the verified scope of business only.

Chapter 4 Supervision and Regulation

Article 19 The CIRC shall be empowered to inspect the business operations, financial affairs and expenditure of funds of the insurance companies with foreign investment, to demand the insurance companies with foreign investment to provide relevant documents, materials and written reports within a prescribed period of time, and to punish the companies according to law for their violation of laws or regulations.

The insurance companies with foreign investment shall accept the lawful supervision and regulation of the CIRC, provide relevant documents, materials and written reports in a true-to-the-fact way, and may not refuse or impede its supervision and inspection or conceal any information.

Article 20 A insurance company with foreign investment may not have any of the following dealings with its connected enterprises unless approval of the CIRC is obtained:

1. The outward or inward reinsurance of reinsurance;
2. The buying or selling of assets or other dealings.

The term "connected enterprise" as mentioned in the preceding paragraph shall refer to an enterprise that has any of the relations with the insurance company with foreign investment as mentioned below:

1. The controlling of shares or contributions;
2. Being jointly controlled by a third party in terms of shares of contributions;
3. Other relations that are connected in interests.

Article 21 The branch companies of a insurance company with foreign investment shall, within three months after the completion of each financial year, submit to the CIRC the financial statements thereof and that of the head office for the previous year; and these financial statements shall be publicized.

Article 22 If any of the following circumstances occurs to the head office of the branch company of a insurance company with foreign investment, the branch company shall, within 10 days after the occurrence of the circumstance, report to the CIRC in writing about relevant information:

1. Changing the title of the head office or the major person-in-charge or the place of registration;
2. Changing the registered capital;
3. Changing shareholders that holds more than 10% of the total capital or shares;
4. Readjusting the scope of business;
5. Being punished by relevant authority of the country or region where it is situated;
6. Suffering from heavy losses;
7. Being split, merged, dissolved or canceled according to law or being declared bankrupt;
8. Other circumstances as provided by the CIRC.

Article 23 In case the head office of the branch company of a insurance company with foreign investment is dissolved or canceled or being declared bankrupt according to law, the CIRC shall stop the branch office from doing any new business.

Article 24 A insurance company with foreign investment that is engaged in the insurance of foreign exchange shall abide by the pertinent provisions concerning foreign exchange.

A insurance company with foreign investment that does business within the territory of the China shall make their settlements in Renminbi unless it has obtained the approval of the State administrative department of foreign exchange.

Article 25 The documents, materials and written reports to be submitted or reported to the CIRC as provided in the present Regulation shall be provided in the Chinese language.

Chapter 5 Termination and Liquidation

Article 26 In case a insurance company with foreign investment needs to be dissolved as a result of split, merger or other reasons for dissolution as stipulated in the articles of incorporation, it may not be dissolved until approval of the CIRC has been obtained. To dissolve a insurance company with foreign investment, a liquidation team shall be formed so as to carry out liquidation.

Article 27 Any insurance company with foreign investment whose License of Engaging in the Business of Insurance is revoked by the CIRC due to violation of laws or administrative regulations shall be revoked according to law, and a liquidation team shall be formed in time so as to carry out liquidation.

Article 28 The liquidation of a insurance company with foreign investment as a result of being dissolved or revoked shall be publicized at least three times in newspapers within 60 days after the formation of the liquidation team. The content to be publicized shall be subject to the verification of the CIRC.

Article 29 In case a insurance company with foreign investment cannot pay off its due debts, it may, upon the consent of the CIRC, be declared bankrupt by the people's court according to law. If a insurance company with foreign investment is to be declared bankrupt, a liquidation team shall be formed by relevant departments like the people's court, the CIRC, etc. and relevant persons to carry out the liquidation.

Article 30 Where a insurance company with foreign investmenty is dissolved or revoked or declared bankrupt according to law, it may not transfer any of its assets to beyond the territory of China before it has paid off its debts.

Chapter 6 Legal Liabilities

Article 31 Any one who establishes a insurance company with foreign investment as against the provisions of the present Regulation or is engaged illegally in the insurance business shall be clamped down by the CIRC. In case the violation constitutes the crime of establishing financial institutions without authorization or the crime of illegal business operations or any other crime, the offender shall under take criminal liabilities; if the violation is not serious enough for criminal punishment, the illegal gains shall be confiscated by the CIRC, and a fine of not less than 1 time but not more than 5 times the illegal proceeds shall be imposed upon the offender; if no illegal proceeds have been incurred or the illegal proceeds are not as much as 200,000 yuan, the offender shall be fined not less than 200,000 yuan but not more than 1 million yuan.

Article 32 In case a insurance company with foreign investment violates the provisions of the present Regulation by engaging in the insurance business beyond the verified scope of business or geographic area or scope of clients and such violation has constituted the crime of illegal business operations or any other crime, the offender shall be held to take criminal liabilities; if the violation is not serious enough for undertaking criminal liabilities, it shall be ordered by the CIRC to make corrections and to refund the premiums that have been collected, to have its illegal proceedings be confiscated and be imposed upon a fine of not less than 1 time but not more than 5 times the illegal proceeds; if no the illegal proceeds have been incurred or the illegal proceeds are not as much as 100,000 yuan, it shall be fined not less than 100,000 yuan but not more than 500,000 yuan. In case the offender fails to make corrections within the time limit or serious consequences have resulted, it shall be ordered to suspend business for a certain period of time or its License of Engaging in the Insurance Business shall be revoked.

Article 33 In case a insurance company with foreign investment violated the provisions of the Regulation and does any of the following acts, it shall be ordered by the CIRC to make corrections and be fined not less than 50,000 yuan but not more than 300,000 yuan; if the circumstances are serious enough, it may be ordered to stop accepting new transactions or its License of Engaging in the Insurance Business may be revoked:

1. Failing to draw and deposit a caution money or use the caution money in violation to the relevant provisions;
2. Having dealings with connected enterprise as in violation of relevant provisions;
3. Failing to make up the registered capital or operating funds as pursuant to relevant provisions.

Article 34 Any insurance company with foreign investmenty that violates the provisions of the present Regulation by doing any of the following acts shall be ordered by the CIRC to make corrections; in case it fails to make corrections within the prescribed time limit, it shall be fined not less than 10,000 yuan but not more than 100,000 yuan:

1. Failing to submit or report relevant documents, materials or written reports as pursuant to relevant provisions;
2. Failing to make public announcements.

Article 35 Any insurance company with foreign investment that violates the present Regulation by doing any of the following acts shall be imposed upon a fine by the CIRC of not less than 100,000 yuan not more than 500,000 yuan:

1. Providing false documents, materials or written reports;
2. Refusing or impeding lawful supervisions or inspections.

Article 36 Any insurance company with foreign investment that violates the provisions of the present Regulation by transferring its assets to beyond the territory of China shall be ordered by the CIRC to transfer back the assets that have already been transferred and be imposed upon a fine of 20% of the value of the transferred assets.

Article 37 In case any insurance company with foreign investment violates the relevant laws or administrative regulations of China or the present Regulation, the CIRC may revoke disqualify the senior management staff of the company from taking posts in China during a certain period of time or for the whole of his life.

Chapter 7 Supplementary Provisions

Article 38 In case anything concerning the administration of insurance companies with foreign investment is not provided in the present Regulation, the Insurance Law of the People's Republic of China or other relevant laws or administrative regulations or other relevant provisions of the State shall be applied.

Article 39 The present Regulation shall be applicable to the establishment and business operations of insurance companies within the Mainland of China by insurance companies from the Hong Kong and Macao Special Administrative Regions and from Taiwan.

Article 40 The present Regulation shall enter into force as of February 1, 2002。

Promulgated by The State Council on 2001-12-12

注意事项：

在本英文翻译版本同汉语原版本出现任何不符时，以汉语版本为准。

Important Notice:

In case of this English version has any discrepancy with the original version in Chinese, the Chinese version shall prevail