BIZCHINA / Finance
Insurance Law of the People's Republic of China
Updated: 2006-04-18 09:11
Article 103. The financial supervision and management departments shall
have the right to restrict or forbid an insurance company in ceding
outward reinsurance to offshore insurance companies, or in underwriting
inward reinsurance from offshore insurance companies.
Article 104. Insurance companies shall use their capital funds in a
stable way, abide by the principle of safety and maintain and increase
the value of such capital.
The use of capital funds by an insurance company shall be limited to bank
savings, the purchase of government bonds and financial securities and
other use of capital funds as stipulated by the State Council.
An insurance company's capital funds shall not be used to establish
securities companies or to invest in enterprises.
The financial supervision and management department shall determine over
the maximum proportion that the total amount used by an insurance company
and the amount for specific projects bears to the capital of the
insurance company.
Article 105. In conducting insurance business activities, an insurance
company and its staff and employees shall not commit any of the following:
(1) deceive the Applicant, the Insured or the Beneficiary;
(2) withhold from the Applicant any material information in connection
with the insurance contract;
(3) prevent the Applicant from performing his obligation of giving
truthful information as stipulated herein, or to induce the Applicant not
to perform his obligation of giving truthful information as stipulated
herein; and
(4) promise the Applicant, the Insured or the Beneficiary commission on
insurance premiums or other benefits that are excluded from the insurance
contract.
Chapter V Supervision and Management of the Insurance Industry
Article 106. The basic terms and conditions and the premiums for the
principal types of commercial insurance to be underwritten by an
insurance company shall be determined by the financial supervision and
management departments.
The terms and conditions and the premiums for other proposed types of
insurance to be underwritten by an insurance company shall be filed with
the financial supervision and management departments.
Article 107. The financial supervision and management departments shall
have the right to inspect the business, financial and capital situation
of insurance companies and shall have the right to ask insurance
companies to provide relevant written reports and information within a
stipulated time limit.
Insurance companies shall, in accordance with the law, accept the
supervision and inspection by the financial supervision and management
departments.
Article 108. Where an insurance company fails to set aside or retain the
different types of insurance reserve funds as stipulated hereunder, or
fails to undertake reinsurance as stipulated hereunder, or is in material
violation of any stipulations hereunder concerning the use of capital
funds, the financial supervision and management departments shall order
such insurance company to make corrections within a set period by taking
the following measures:
(1) To set aside or retain the different types of insurance reserve funds
in accordance with the law;
(2) To undertake reinsurance in accordance with the law;
(3) To correct any acts of using the capital funds against the law;
(4) To remove or change responsible personnel and related management
staff.
Article 109. As set forth in the previous article hereof, after the
financial supervision and management departments decides on a correction,
which the insurance company fails to make within the set period, at the
sole discretion of the supervision and management department, specialized
insurance personnel and designated staff of the concerned insurance
company will form a rectification organization to rectify the insurance
company.
The decision of rectification shall bear the name of the insurance
company, causes for rectification, the rectification organization and the
term of rectification, and shall be publicly announced.
Article 110. During the course of the rectification, the rectification
organization shall have the right to supervise the daily business of the
insurance company. The responsible personnel of the insurance company as
well as related management staff shall exercise their powers under the
supervision of the rectification organization.
Article 111. During the course of the rectification, the existing
business of the insurance company shall continue, and the financial
supervision and management departments shall have the right to stop
developing new business or stop part of the existing business in order to
adjust the use of capital funds.
Article 112. When the rectified insurance company has corrected its acts
in violation of this Law and has returned to normal operation, the
rectification organization shall present a report, and subject to the
approval of the financial supervision and management department, the
rectification shall be terminated.
Article 113. Where an insurance company violates the stipulations hereof
and harms public interest, which, as a result may seriously endanger or
has endangered the insurance company's solvency, the financial
supervision and management department may take over the insurance company.
The purpose of such takeover is to take necessary measures against the
insurance company so as to protect the interest of the Insured and
restore the normal operation capacity of the insurance company taken
over. After takeover, the obligations and liabilities of the insurance
company shall remain unchanged.
Article 114. The formation of the takeover organization and the
implementation measures for the takeover shall be subject to the decision
of the financial supervision and management departments and shall be
publicly announced.
Article 115. Upon expiration of the term of takeover, the financial
supervision and management department may decide to extend such term;
provided, however, that the term of takeover shall not exceed two years.
Page: 1 2 3 4 5 6 7 8 9 10 11 12
(For more biz stories, please visit Industry Updates)
Most Popular Stories in 48 Hours
� Foreign firms look to hotel sector
� Steelmakers to reject 19% iron ore hike
� Talks start over gov't contracts
� Boeing expects B747-8 success in Asia
� Money supply growth still climbing
Today's Top News
� 21 killed, 1mln evacuated as typhoon hits S.China
� FM brands spying claims 'fictitious'
� US gov't limits Chinese computers use
� Chairman Mao portrait up for auction
� Pay rises by 16% for State sector workers
Top Biz News
� China bans import, export of endangered species
� China Mobile in talks with Google to add Web services
� UK offers aid to improve life in poorest areas
� Nation's first A380 pilot to receive training
� Export of fishery workers to Taiwan resumed
Alibaba is the largest B2B marketplace in the world. Source model ship,
wooden puzzle, one-piece toilet, RC hovercraft, photo album, prom dress,
pocket bike, Vaginal Speculum, Samurai Sword, String Panty and PVC Pipe.
Chinese language
