China fully opened up its insurance industry to foreign capital at the end of 2004. Four features in the opening up of the industry this year are: internationalization of insurance companies, internationalization of insurance business, internationalization of insurance market and the internationalization of insurance supervision.
More foreign-funded insurance companies emerge in China. Large insurance companies in China such as China Life Insurance, the People's Insurance of China and Ping'an Insurance have been listed overseas, and many domestic insurance companies are attracting foreign strategic investors.
China will fully open up its financial industry by the end of 2006, putting China's insurance industry among more fierce international competitions, and the absolute advantage of international financial and insurance groups contrasts with China's insurance industry's comparatively low operation and management level.
China's insurance industry will continue its opening up policy next year:
--Resolutely continue the opening up course of the insurance industry. Promote development through reform and opening up. Unremittingly fulfill the commitment to opening up the industry and gear it to international standards.
--Give priority to key issues and optimize the structure. Introduce foreign insurance capital into such fields as endowment insurance, health insurance, agriculture insurance and responsibility insurance. Support domestic and foreign-funded insurance companies to set up branches for business operations in middle and western part of China. Encourage and support domestic-funded insurance companies to invite renowned international financial and insurance groups as strategic investors and bring their role into full play in improving cooperate governance.
--Enhance the internationalization level of supervision. Intensify and improve the modern insurance supervision system pillared by solvency supervision, market behavior supervision and corporate governance supervision. Bring forth new ideas into the supervision system in accordance with the comprehensive financial operations. Beef up cooperation with other supervision departments, promote exchange on international insurance supervision and intensify supervision coordination with the supervision departments at the headquarters of foreign-funded insurance companies. Enhance insurance exchanges and cooperation with neighboring countries and regions to strengthen supervision of cross-border insurance. Actively participate in the formulation of international insurance regulations and supervision principles. Set up long-term personnel exchange mechanism with international insurance organizations and supervision institutes.
--Guard against risks and safeguard national financial and insurance security. Based on the actual situation and bearing capacity of China's insurance industry, give timely assessment of the risks in the internationalization of the industry among international competitions and implement relevant systems and measures. Closely monitor the tendency in the international market and prevent foreign-funded insurance companies from transmitting risks in China's insurance companies. Strictly prohibit money-laundering activities.
(China.org.cn by Yuan Fang December 21, 2005)
