Laws of the People's Republic of China

In accordance with the related commitments of China for accession to the WTO, as of December 11, 2006, foreign insurance brokerage companies are permitted to establish solely foreign-funded insurance brokerage companies in accordance with law (There is no restriction other than those on establishment conditions and business scope). The China Insurance Regulatory Commission

December 11, 2006

Contents Related to insurance industry in the Legal Documents of China's Accession to the WTO

1.

Time Schedule of Commitments

(1)

Life Insurance

(a)

At the time of accession

Foreign life insurance companies are allowed to set up joint venture companies in Shanghai, Guangzhou, Dalian, Shenzhen and Foshan, the proportion of foreign investments may amount to 50%, and the foreign parties may choose their partners freely. The aforesaid companies are permitted to provide individual (non-group) life insurance services to foreign and Chinese citizens.

No restrictions of economic demand tests or quantity on the permits shall be established to the issuance of business permits, and the establishment conditions are as follows: (i) the investor shall be a foreign insurance company operating for over 30 years within any WTO member state; (ii) the company shall have established a representative office in China for two successive years; and (iii) the total year-end assets of the company for the year before the application shall be USD 5 billion or more.

(b)

In two years as of accession

The opened area shall be expanded to Beijing, Chengdu, Chongqing, Fuzhou, Suzhou, Xiamen, Ningbo, Shenyang, Wuhan and Tianjin.

(c)

In three years as of accession

The geographical restrictions shall be cancelled, and joint venture companies shall be permitted to provide health insurance, group insurance, and pension/annuity services to Chinese and foreign citizens (there shall be no restrictions other than those on the proportion of foreign investments of no more than 50%, and those on establishment conditions).

(2)

Non-life insurance

(a)

At the time of accession

Foreign non-life insurance companies shall be permitted to undertake international shipping, aviation, and transport insurance business. Foreign non-life insurance companies shall be permitted to set up branch companies or joint venture companies in Shanghai, Guangzhou, Dalian, Shenzhen, and Foshan, and the proportion of foreign investments may amount to 51%. The aforesaid companies shall be permitted to engage in "master policy" insurance without geographical restrictions and large-scale commercial insurance, to provide non-life insurance for overseas enterprises, and property insurance and liability insurance and credit insurance related to the property insurance for foreign-funded enterprises in China.

The issuance of business permits shall not be subject to restrictions of economic demand tests or quantity permits, and the establishment conditions are completely the same as those of life insurance companies.

(b)

In two years as of the accession

Foreign non-life insurance companies are permitted to establish solely foreign-funded subsidiary companies. The opened area shall be extended to Beijing, Chengdu, Chongqing, Fuzhou, Suzhou, Xiamen, Ningbo, Shengyang, Wuhan, and Tianjin, and the said companies shall be permitted to provide all-round non-life insurance services to foreign and Chinese customers.

(c)

In three years as of accession

The geographical restrictions shall be cancelled (there shall be no other restriction except those on the establishment conditions).

(3)

Reinsurance and Statutory Secondary Insurance

(a)

At the time of accession

Foreign insurance companies shall be permitted to undertake reinsurance business across the border. Foreign insurance companies shall be permitted to provide reinsurance for life insurance and non-life insurance by forms of branch company, jointly venture company or solely foreign-funded subsidiary company, and there shall be no geographical restrictions or quantity restrictions on the issuance of business permits.

The issuance of business permits shall not be subject to restrictions of economic demand tests or quantity permits, and the establishment conditions are completely the same as those of life insurance companies (there shall be no other restrictions except those on the establishment conditions).

Solely foreign-funded insurance companies are not permitted to conduct statutory reinsurance business.

At the time of accession, 20% of all of its basic risk business of non-life insurance, individual accident and health insurance shall be reinsured to a designated reinsurance company of China.

(b)

In one year as of the accession

The secondary insurance proportion shall be 15%.

(c)

In two years as of accession

The secondary insurance proportion shall be 10%.

(d)

In three years as of accession

The secondary insurance proportion shall be 5%.

(e)

In four years as of accession

The compulsory secondary insurance shall be cancelled.

(4)

Insurance Brokerage

(a)

At the time of accession

Foreign insurance brokerage companies shall be permitted to undertake large-scale commercial insurance brokerage, brokerage businesses of international shipping, aviation, and transport insurance and reinsurance thereof across the border. Foreign insurance brokerage companies shall be permitted to set up joint venture companies in Shanghai, Guangzhou, Dalian, Shenzhen, and Foshan, and the proportion of foreign investment may account for 50%. The aforesaid companies shall be permitted to undertake large-scale commercial insurance brokerage, reinsurance brokerage, and the brokerage for international shipping, aviation, and transport insurance and the reinsurances thereof; and at the same time, those companies shall, on the basis of national treatment, be permitted to provide master policy brokerage services.

The issuance of business permits shall not be subject to restrictions of economic demand tests or quantity permits. For the application for establishing a company, a minimum year-end total asset value of USD 500 million is required, and the remaining conditions shall be as same as those for life insurance companies.

(b)

In one year as of accession

The required minimum total year-end assets shall be USD 400 million for application for establishing a company.

(c)

In two years as of accession

The required minimum total year-end assets shall be USD 300 million for application for establishing a company.

(d)

In three years as of accession

The geographical restrictions shall be cancelled, and the proportion of foreign investments may not more than 51%.

(e)

In four years as of accession

The required minimum total year-end assets shall be USD 200 million for application for establishing a company.

(f)

In five years as of the accession

Establishment of solely foreign-funded subsidiary companies shall be permitted (there shall be no other restriction except those on the establishment conditions and business scope).

2.

Interpretations of some terms used in the concessions schedule of specific commitments of China

(1)

Master Policy

A master policy is a policy that provides blanket coverage of property and liabilities located in different places of a same legal person. A master policy may only be issued by the head office of an insurance company or the business department of a provincial branch company authorized by it and no other branches may issue.

(a)

Master policy business of which the insurance subject is a key project of the state

In case the insurance subject is a key construction project of the state (namely, the project listed and publicized by the State Development Planning Commission for each year), and the investor satisfies one of the following requirements, its insurance may be handled by the insurance institution at the place where the investing legal person is located by master policy.

(i)All the investments for the insurance subject matter come from China (including reinvestments by foreign-funded enterprises in China), and the investor's investment account for more than 15% of the total investment amount.

(ii) Some investments are from abroad, and some from China (including reinvestments by foreign-funded enterprises in China), and the Chinese investor's investment accounts for more than 15% of the total amount of domestic investments. Or

(iii) In case all of the project's investments are from abroad, each insurance company may handle the business through master policy.

(b)

Master policy covering different insurance subject matters of the same legal person.

As for the insurance subject matters located at different places and belonging to the same legal person (excluding such industries and enterprises as finance, railway, and post), a master policy may be issued if any of the following conditions is satisfied.

(i)With a view of the payment of premium tax, an insurance company at the locality of the legal person or accounting entity of the policy holder shall be permitted to issue a master policy. Or

(ii) In case more than 50% of the insured value of the insurance subject matter is from a large-or medium-scale city, then an insurance company in the place where that city is located may be permitted to issue a master policy, without regarding whether the legal person or accounting entity of the policy holder is located in the city or not.

Motor vehicle insurance, credit insurance, employer liability insurance, statutory insurance, and other insurance business not included by the China Insurance Regulatory Commission may not be undertaken or reinsured by any other insurance company not located in the locality of the insurance subject matter, or be covered by any master policy.

(2)

Large-scale Commercial Insurance

Large-scale commercial insurance refers to insurance provided to any large-scale commercial enterprise and meeting the following conditions: at the time of accession, the annual premium paid by such an enterprise is more than RMB 800 thousand, and its investment amount is more than RMB 200 million; one year as of accession, the annual premium paid by the enterprise exceeds RMB 600 thousand and its investment amount is more than RMB 180 million; or two years as of accession, the annual premium paid by the enterprise exceeds RMB 400 thousand and its investment amount is more than RMB 150 million.

(3)

Statutory Insurance

The statutory insurance as mentioned in the concessions schedule of specific commitments of China shall be restricted to the following specific types, and will not be extended to any other industry or product: automobile third party liability insurance, liability insurance for the drivers and operators commercial vehicles including buses.

(4)

Alteration of the related definitions

Any alteration of the definition of master policy and large-scale commercial insurance shall be accord with the concession schedule of specific commitments of China and the obligations under CATS so as to open the market accession to these service sectors gradually.

3.

Other Matters

(1)

The qualification requirements for foreign insurance companies applying for license to access to China's market shall not apply to the foreign insurance companies that have already been established in China and seek for the establishment of branches or sub-branches.

(2)

Branches and sub-branches are the extension of the parent companies, and are not legal entities with independent status. China will, on this basis and in conformity with the concessions schedule of specific commitments of China, including the provisions on most favored nation treatment, permit the establishment of branches.

(3)

With regard to the requirements on previous experiences for the establishment of commercial institutions in the insurance sector, the merger, division, restructuring, or any other alteration of the legal form of an insurance company will not impact the requirements on previous experiences included in the schedule of concessions of specific commitments of China, if the new entity continues to provide insurance services.