On 9 April 2013, the CIRC promulgated the Notice on Relevant Issues regarding Article 4 (“Notice”) of the Administrative Measures on Equity Interest in Insurance Companies (“Measures”). Article 4 sets the maximum shareholding of any one shareholder in a domestic insurance company at 20% which percentage cannot be exceeded unless the shareholder meets the requirements under Article 15 and the Notice (set out below). A domestic insurance company is defined as an insurance company in which the aggregate shareholding of its foreign shareholders is less than 25%.
Requirements under Article 15 of the Measures
The applicant must:
- be capable of making continuous capital contribution, and in each of the three most recent fiscal years the applicant must have been profitmaking;
- have strong financial capability, with net assets of RMB200 million or more;
- be of a good creditworthiness and a leading company in its industry.
Additional requirements under the Notice
The applicant must also:
- have total assets of RMB10 billion or more at the end of the immediately proceeding year;
- have a net asset value of not less than 30% of the value of total assets;
- the value of long-term equity investments (including the investment in insurance companies) being no higher than its net asset value;
- have invested in the domestic insurance company for three years or more;
- not have acted in violation of the laws and regulations regarding acts of insurance companies’ shareholders.