Since the first round of liberalisation policies for China’s insurance sector was announced in 2018, Beijing has continued implementing various measures, including moving up the deadline for allowing 100% foreign ownership in life insurance companies to 2020.
According to Lynn Yang, partner at Norton Rose Fulbright in Shanghai, these moves signal the Chinese government’s commitment to attracting foreign investment into China.
In a legal alert, Yang said that in the near future, more foreign investors, including non-insurance financial institutions, will be able to invest in insurance companies in China. Furthermore, qualification requirements imposed on foreign investors will be largely removed or liberalised, which will make the opening up of foreign investment in the Chinese insurance sector proceed faster.
Beginning in 2020, qualified foreign investors will be allowed to wholly own life insurance companies in China. While Chinese regulators have yet to specify a date foreign investors will also soon be allowed to wholly own insurance asset managers, allowing them to tap into the asset management business in China. Foreign insurance groups will also be permitted to set up insurance institutions in the country.
The legal alert also set out qualifications for foreign investors. Potentially all foreign institutions can invest in insurers, with the removal of the requirement that foreign investors have to have operated an insurance business for at least 30 years. In addition, regulatory decisions have also been made to remove the requirement for foreign investors to have had an insurance representative office in China for at least two years, Yang said.
