Introduction to Foreign Investment in the Insurance Industry

Some exclusively foreign-owned insurance companies, represented by US and Japanese companies began to set up representative offices in China in the early 1980s. From then on, the Chinese and foreign insurance industries began to cooperate with each other.

On September 11, 1992, with the issuance of the Temporary Supervisory Regulations for the Exclusively Foreign-Owned Insurance Institutions in Shanghai by the People's Bank of China, exclusively foreign-owned insurance companies began to flow into China.

In December 1992, AIA (American International Assurance) set up a branch in Shanghai with permission to provide property and relevant liability insurance for enterprises abroad, domestic exclusively foreign-owned enterprises and joint ventures (JV) in Shanghai. It can also provide life insurance and re-insurance services for foreigners and individuals in China willing to pay the insurance fees. China's insurance market experienced substantial development during this period.

Until the end of 1999 there were 11 exclusively overseas-owned insurance companies in China: the Shenzhen Branch of Hong Kong Min'an Insurance Company, officially approved in January 1982; Haikou Branch of Hong Kong Min'an Insurance Company, officially approved in October 1988; Shanghai Branch of AIA, officially approved in September 1992; Hua Tai Insurance & Consulting Service Co Ltd, officially approved in December 1992; British Sachewick Insurance & Risk Management Consulting Co Ltd, officially approved in May 1993; Shanghai Branch of Tokyo Overseas Property Insurance in Japan, officially approved in July 1993; Guangzhou Branch of AIA, officially approved in September 1995; Guangzhou Branch of Aiush (Meiya) Insurance Company in the United States, officially approved in September 1995; Zhong Hong Life Assurance Co Ltd, officially approved in November 1996; Shanghai Branch of Tai Feng Asian Insurance Co Ltd, officially approved in November 1996 and Shanghai Branch of Aiush (Meiya) Insurance Company in the United States, officially approved in May 1997.

The opening of China's insurance market was greatly developed in 2000. In total, two JV insurance companies and two exclusively foreign-owned insurance companies received an official approval to open businesses in China and China Insurance Limited Liability Company resumed its domestic business. The four life-insurance companies -- China Minsheng Insurance Company, Dongfang Life Assurance Company, Shengming Life Assurance and Heng'an Life Assurance -- are permitted to set up JV life-insurance companies in China.

At present there are 18 total branches of exclusively foreign-owned insurance companies and JV insurance companies in China either already in operation or preparing to launch operations. There are also 201 foreign representative offices in China that belong to 17 countries and 113 regions, many of which have already applied to the China Insurance Regulatory Commission toopen insurance businesses in China.

[Source: 2001 Yearbook of China's Insurance]