Publication
What M&A trends will transform the 2024 insurance landscape?
It is widely accepted that 2023 was one of the worst years in recent memory for M&A activity.
Global | Publication | November 2019
Following the first round of liberalization measures in the Chinese insurance sector, China has been developing legislation to open the sector further to foreign investment.
Following Premier Li Keqiang’s announcement at the 2019 Summer Davos Forum in July 2019, the 51 percent foreign shareholding restriction for life insurance companies will be fully lifted in 2020, one year earlier than originally planned.
We set out below some key aspects, in particular the legislative developments relevant to foreign invested insurers (FIE Insurers), foreign invested professional insurance agents (FIE PIAs), foreign invested insurance brokers (FIE Insurance Brokers) and foreign invested insurance asset management companies (FIE Insurance Asset Managers) that are likely to be of particular interest to foreign investors.
FIE Insurers | FIE PIAs | FIE Insurance Brokers | Insurance asset managers | |
Is there any foreign shareholding restriction? |
|
No, up to 100 percent shareholding ownership is permitted.
|
No, up to 100 percent shareholding ownership is permitted.
|
Yes – currently limited to a maximum of 25 percent but this restriction will soon be lifted and up to 100 percent shareholding will be permitted.
|
Who can be a foreign shareholder? |
Potentially open to all foreign institutions (subject to some qualification requirements). The requirement to have been involved in insurance business for at least 30 years has been removed. Decisions have been made to remove the requirement to have had an insurance representative office in China for at least two years1 (we are still waiting for detailed rules on implementation) |
Specialist foreign insurance agencies that have engaged in insurance intermediation for at least three years (subject to non-hard core qualification requirements) It is no longer necessary to follow the strict qualification requirements set out under the CEPA2regime so as to wholly own an FIE PIA. |
Specialist insurance brokerage institutions (subject to some qualification requirements) The requirement to have minimum total assets amounting to USD200m by the end of the latest fiscal year has been removed. Decisions have been made to remove the following qualification requirements (waiting for detailed rules to implement):
|
Foreign insurance group company or insurance company (acting as the promoter) satisfying the following qualification requirements:
|
What is the minimum requirement on capital contribution? |
|
|
|
|
Approval from CBIRC?4 | Yes – prior approval from CBIRC is required | Post approval from CBIRC, after the company registration | Post approval from CBIRC, after the company registration | Yes – prior approval from CBIRC is required |
Is branch establishment permitted? | Yes, upon prior CBIRC approval | Yes, post reporting to CBIRC | Yes, post reporting to CBIRC | Yes – with prior approval from CBIRC |
Although the relevant legislation has not yet been updated, we understand that the two-year representative office requirement has been lifted by the CBIRC in practice.
CEPA refers to the Mainland and Hong Kong Closer Economic Partnership Arrangement.
See footnote 1.
CBIRC refers to the China Banking and Insurance Regulatory Commission.
Publication
It is widely accepted that 2023 was one of the worst years in recent memory for M&A activity.
Publication
On 6 September 2022, the European Commission (EC) prohibited Illumina’s acquisition of Grail, bringing to an end the administrative stage of a legal saga that has attracted interest beyond competition law specialists.
Subscribe and stay up to date with the latest legal news, information and events . . .
© Norton Rose Fulbright LLP 2023