Featured Product

    CBIRC Issues Measures on Related Party Transactions for Insurers

    September 09, 2019

    CBIRC issued administrative measures on related party transactions of insurance companies. These measures shall come into force as of the date of promulgation. CBIRC also issued questions and answers (Q&As) on these administrative measures. These measures aim to regulate the related party transactions of insurance companies, prevent the risks of connected transactions, safeguard the independence of insurance companies, and the interests of insurance consumers. The measures have been formulated in accordance with the relevant provisions of the Company Law of the People's Republic of China and the Insurance Law of the People's Republic of China.

    Under these measures, the related transactions of an insurance company are classified into significant related party transactions and general related party transactions. Significant related party transactions refer to transactions in which the single or annual cumulative transaction amount between the insurance company or its holding subsidiaries and a related party reaches more than CNY 30 million and accounts for more than 1% of the audited net assets of the insurance company at the end of the previous year. General related party transactions refer to related party transactions other than material related party transactions. The key points covered in the administrative measures include the following:

    • To improve the related party recognized standards. The measures draw on the international and domestic accounting standards and the actual situation of the supervision of related transactions of insurance companies in China, and reasonably defines the criteria for the identification of related parties.
    • To develop regulatory indicators. The measures will help to further improve the proportion of supervision of fund-use related transactions, establish a proportional cap, and control the overall risk of connected transactions.
    • To improve internal control and accountability mechanisms. The insurance company is required to set up the Board of Directors' Related Party Transaction Control Committee and the Related Party Transaction Management Office, which will be responsible for the comprehensive and daily management of the connected transactions, optimize the management process, and improve the internal control mechanism.
    • To strengthen information disclosure. The Board of Directors' Related Party Transaction Control Committee will coordinate the management of information disclosure to ensure the authenticity, accuracy, and completeness of the information. Insurance companies are required to disclose not only related party transactions in accordance with accounting standards in the annual report, but also to disclose the overall situation of connected transactions in the current year, in accordance with regulatory requirements.
    • To strengthen the regulatory function. The measures set up a special section to clarify the related transaction management and supervision duties, requiring the insurance company shareholders, directors, supervisors, senior management personnel, and other related parties to truthfully disclose the relevant information of the relationship, without concealing information or providing false statements.

     

    Related Links (in Chinese)

    Effective Date: September 09, 2019

    Keywords: Asia Pacific, China, Insurance, Reinsurance, Proportionality, Related Party Transactions, CBIRC

    Related Articles
    News

    PRA Consults on Implementation of Certain Provisions of CRD5

    PRA, via the consultation paper CP12/20, proposed changes to its rules, supervisory statements, and statements of policy to implement certain elements of the Capital Requirements Directive (CRD5).

    July 31, 2020 WebPage Regulatory News
    News

    EIOPA Report Identifies Key Financial Stability Risks for Insurers

    EIOPA published the financial stability report that provides detailed quantitative and qualitative assessment of the key risks identified for the insurance and occupational pensions sectors in the European Economic Area.

    July 30, 2020 WebPage Regulatory News
    News

    EBA Publishes Risk Dashboard for First Quarter of 2020

    EBA published its risk dashboard for the first quarter of 2020 together with the results of the risk assessment questionnaire.

    July 30, 2020 WebPage Regulatory News
    News

    EBA Issues Updates on Stress Test Exercise for Banks in EU

    EBA announced that the next stress testing exercise is expected to be launched at the end of January 2021 and its results are to be published at the end of July 2021.

    July 30, 2020 WebPage Regulatory News
    News

    PRA Proposes Guidance Related to Matching Adjustment under Solvency II

    PRA published the consultation paper CP11/20 that sets out its expectations and guidance related to auditors’ work on the matching adjustment under Solvency II.

    July 30, 2020 WebPage Regulatory News
    News

    MAS Issues Guidance on Dividend Distributions by Banks

    MAS published a statement guidance on dividend distribution by banks.

    July 30, 2020 WebPage Regulatory News
    News

    APRA Updates Guidance on Capital Management for Banks

    APRA updated its capital management guidance for banks, particularly easing restrictions around paying dividends as institutions continue to manage the disruption caused by COVID-19 pandemic.

    July 29, 2020 WebPage Regulatory News
    News

    FSB Report Reviews Macro-Prudential Framework and Tools in Germany

    FSB published a report that reviews the progress on data collection for macro-prudential analysis and the availability and use of macro-prudential tools in Germany.

    July 29, 2020 WebPage Regulatory News
    News

    EBA Urges Firms to Finalize Preparations for End of Brexit Transition

    EBA issued a statement reminding financial institutions that the transition period between EU and UK will expire on December 31, 2020; this will end the possibility for the UK-based financial institutions to offer financial services to EU customers on a cross-border basis via passporting.

    July 29, 2020 WebPage Regulatory News
    News

    SRB on Operational Continuity in Resolution and FMI Contingency Plans

    SRB published guidance on operational continuity in resolution and financial market infrastructure (FMI) contingency plans.

    July 29, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5606