Starting from January 1, the restriction on foreign ownership in joint venture (JV) life insurance companies will be officially removed in China.
As a result foreign ownership in JV life insurers can reach 100% – a move that has long been flagged; China had previously said the move would happen next year rather than 2021.
Relevant parties may submit applications to the China Banking and Insurance Regulatory Commission in accordance with the Regulations on Foreign-funded Insurance Companies and the Implementation Rules of the Regulations on Foreign-funded Insurance Companies. The CBIRC will review and approve the applications in accordance with relevant laws and regulations.
The CBIRC will start the revision of the provision of “foreign ownership shall not exceed 51% of the company’s total equity capital” in the existing implementation rules on foreign-funded insurers, which will be reissued after revision.
It was previously announced that foreign insurers can set up insurers in China without the previous requirement to have been in business for more than 30 years and to have established a representative office in China for more than two years. Foreign financial institutions are also allowed to take shares in foreign-funded insurance companies in China.
The CBIRC also pledged to improve its oversight and risk management capacity as the sector opens up, in order to attract more foreign investment.
The first wholly owned foreign insurance operations were granted almost a year ago, when Axa bought out its domestic joint-venture partner and within the last few weeks Allianz won initial approval to set up a wholly owned holding company. AIA also owns its China business outright, but it was grandfathered in under a licence that pre-dated the restrictions

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