In order to encourage product innovation and meet the growing demand for investment linked products in the insurance market, the CIRC launched a trial programme of allowing PRC licensed insurers to sell variable annuity products in Beijing, Shanghai, Guangzhou, Shenzhen and Xiamen (Trial Programme).

All variable annuity products are required to be approved by the CIRC. The applicant insurance company must also in its application for approval explain its proposed sales methods and expected sales volume in respect of the variable annuity products.

In addition, insurance companies which wish to participate in the Trial Programme must satisfy the following requirements:

(i) have at least three years of experience in investment linked insurance business;

(ii) have no record of severe administrative sanctions by the CIRC in the previous one year;

iii) have a solvency ratio of more than 150% at the end of the previous year and during the last two quarters before submitting application; and

(iv) have established an adequate information system in support of the administration of the variable annuity products.

During the trial period, an insurance company can only apply for authorisation of one variable annuity product and the term of insurance cover under the product must not be less than seven years. The CIRC has also set out strict qualification requirements in respect of agents and brokers who may engage in the promotion and sale of variable annuity products.

(Source: CIRC’s website)