China issues regulations on reinsurance market

China Insurance Regulatory Commission (CIRC) announced Friday that it has issued the regulations on reinsurance management.

It is the first time that China releases regulations that fully covers the whole reinsurance market. And analysts say the regulations will exert far-reaching impact on the market development.

The regulations set forth new requirements on the staff and products of reinsurance companies and set up a report system on obligation reserve, solvency and reinsurance business.

The solvency of branches of foreign reinsurance companies should be judged on the basis of their parent companies and concerned reports should be delivered to the CIRC to prove the parent companies' solvency and state of performance.

Measures are also taken to protect domestic reinsurance market and reduce risks on the market, according to the regulations.

In accordance with China's commitments to the World Trade Organization, the reinsurance market will fully open up and the cession limit will be cancelled by 2006.

Source: Xinhua