China's Insurance regulator may speed up its approval of foreign non-life insurers' applications to transform their branches to subsidiaries, going by an agreement at the China-US Strategic Economic Dialogue.
A decision on this will be made before August 1, according to the agreement.
The China Insurance Regulatory Commission (CIRC), the industry watchdog, will impose a 60-day time limit for application approval.
A branch can't do business in other provinces but a subsidiary has the legal status to do so.
"Being a subsidiary could help boost our geographical expansion," said George Huang, China chief representative of US-based non-life insurer Chubb Group.
The CIRC has approved the application of a batch of foreign non-life insurers, such as Tokio Marine Nichido Insurance and Samsung Fir & Marine Insurance.
But some are yet to get the clearance even months after they applied. AIU Insurance, the property and casualty arm of AIG, filed an application in June but hasn't received a green light until now.
"We have seen the agreement reached during the China-US economic talks and are still working closely with the CIRC," said Robin Gu, head of the public relations department of AIU Shanghai branch.
Foreign non-life insurers saw a 24.5 percent growth in premium in 2005, 10 percentage points higher than that of domestic insurers, shows CIRC statistics.
Some US experts are also keen on greater access for foreign insurers to innovative products.
"Such products would bolster the financial security of Chinese companies and offer models to domestic insurers," said Marc Racicot, president, American Insurance Association (AIA), which consists of 350 major non-life insurers.
"Unfortunately, our companies experience delays in getting these products approved, which results in less efficiency for both Chinese and American businesses and consumers," said Racicot. "This should change and we're hopeful that it will change in the future."
AIA member-companies are seeking to offer innovative insurance coverages in China, including political risk insurance for Chinese companies operating in foreign markets.
(China Daily May 25, 2007)