Laws of the People's Republic of China

Interpretation of China Insurance Regulatory Commission on Issues Concerning Commercial Banks' Application for the Qualification for Concurrent-Business Insurance Agency

July 27, 2006

Recently, China Insurance Regulatory Commission distributed the Notification on Regulating the Commission of Insurance Business by Banks(Bao Jian Fa [2006] No.70). Paragraph 1 of Article 1 stipulates that "Where a commercial bank plans to act as an agent of insurance business, its first-level branches shall acquire the qualifications to be concurrent-business insurance agencies." Some insurance regulatory bureaus, commercial banks and insurance companies called us to consult about the policy implication of this provision. The following interpretations are hereby given as follows:

The first-level branches of some commercial banks or its sub-branches may act as an agent of insurance business without acquiring the Concurrent-Business Insurance Agency License before the issuance of Bao Jian Fa [2006] No.70. While after the issuance of the Document, where a commercial bank plans to act as an agent of insurance business, its first-level branches shall acquire the qualification for concurrent-business insurance agency and the Concurrent-Business Insurance Agency License. The sub-branches shall follow the existing policies on the supervision of concurrent-business insurance agencies before the promulgation of the newly revised Provisions on the Administration of Concurrent-Business Insurance Agencies. The local insurance regulatory bureaus shall make decisions in accordance with the actual situation of the local market and shall execute according to the revised Provisions on the Administration of Concurrent-Business Insurance Agencies after its promulgation.