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Provisions on the Administration of Insurance Brokering Companies

Chapter I General Provisions

Article 1 The present Provisions have been formulated according to the Insurance Law of the People's Republic of China (hereinafter referred to as the Insurance Law) and other relevant laws and regulations for the purpose of protecting the lawful rights and interests of the applicants for insurance and the insured as well as maintaining the fair competition of the market order.

Article 2 The term "insurance brokering company" as mentioned in the present Provisions shall refer to the entities established according to the relevant laws and regulations such as the Insurance Law and the present Provisions upon the approval of the China Insurance Regulatory Commission (hereinafter referred to as the "CIRC") to be engaged in the business of insurance brokering.

Article 3 The term "insurance brokering" as mentioned in the present Provisions shall include direct insurance brokering and reinsurance brokering. The term "direct insurance brokering" refers to the act of brokering by which the insurance brokering company and the applicant enters into a contract of mandate, and, for the sake of protecting the interests of the applicant and the insured, provide intermediary services for the conclusion of an insurance contract between the applicant and the insurer and charges the agreed commissions for the intermediary services.

The term "reinsurance brokering" refers to the brokering act by which the insurance brokering company and the original insurer enters into a contract of mandate and, for the sake of protecting the interests of the original insurer, provide intermediary services for the reinsurance business between the original insurer and the re-insurer, and charges the agreed commissions for the intermediary services.

Article 4 The present Provisions shall be applicable to all the insurance brokering companies established upon the approval of the CIRC to engage in the insurance brokering business within the territory of the People's Republic of China.

Article 5 Any one who is engaged in the insurance brokering company shall be an insurance brokering company established pursuant to the present Provisions. Unless having obtained the approval of the CIRC, no entity or individual may engage in the insurance brokering business within the territory of the people's republic of China.

Article 6 All insurance brokering companies shall abide by the laws, administrative regulations and the relevant provisions of the CIRC in their insurance brokering activities and shall follow the principle of willingness, honesty and fair competition.

Article 7 If any loss is caused to the applicant, insured or other clients as the result of fault on the part of the insurance brokering company in the process of handling insurance brokering business, the insurance brokering company shall undertake legal liabilities according to law.

Article 8 The CIRC exercises supervision and administration over the insurance brokering companies according to law.

Chapter II Establishment

Article 9 An insurance brokering company may be established in the form of a limited liability company or a stock-limited company.

Article 10 Any one who applies for establishing an insurance brokering company shall meet the following requirements:

1. having the shareholders or promoters that conform to the legal provisions;

2. having the articles of incorporation that conform to the legal provisions;

3. having an actually paid registered capital of not less than 10 million yuan;

4. having the company title, organizations and dwelling place that conform to the legal provisions;

5. no less than one half of the employees are brokers that hold a Certificate of Qualifications for Insurance Brokers (hereinafter referred to as "CQIB");

6. having the senior management personnel that conform to the provisions concerning the qualifications as provided by the CIRC;

7. other conditions as required by laws or administrative regulations.

Article 11 The legal name of an insurance brokering company shall include the words "insurance brokering".

Article 12 Any entity or individual that, according to the provisions of laws, administrative regulations or the provisions of the CIRC, may not invest in the insurance brokering business may not be a shareholder or promoter of the insurance brokering company.

Article 13 The qualifications for being a staff member of the senior management personnel of an insurance brokering company shall be subject to the inspections of the CIRC.

The term "senior management of an insurance brokering company" as mentioned in the present Provisions shall include the chairman of the board of directors, the general manager and the vice general managers.

The contents and methods for inspecting the qualifications of the senior management personnel of an insurance brokering company shall include the inspection of the application materials, interviews, examinations, etc. Minutes shall be taken for interviews and shall be signed by both the interviewer and interviewee. The application materials, minutes of interviews and examinations results shall be an important basis for inspecting the qualifications of the people inspected, and shall be put into the archive files of the people inspected together with the opinions of inspection made by the CIRC concerning the qualifications of the people inspected.

Article 14 A member of the senior management personnel of an insurance brokering company shall, apart from holding a CQIB, meet either one of the following conditions: 1. having an undergraduate education background or above of majoring in economics, finance, insurance or law, and shall have an experience of not less than 3 years of engaging in the insurance brokering other relevant businesses; 2. having an undergraduate education background or above of whose major is not economics, finance, insurance or law, and shall have an experience of no less than 5 years of engaging in the insurance brokering or other relevant businesses.

The requirement in education background of any one who have worked in the insurance brokering or other relevant businesses for more than 10 years may be appropriately relaxed.

Article 15 The establishment of an insurance brokering company is divided into two phases: preparations for establishment and starting business.

Article 16 An applicant for establishing an insurance brokering company shall submit the following materials to the CIRC:

1. an application for preparations for establishment;

2. a feasibility study of preparations of establishment, including an analysis of the market situation, ideas for development of the company, business plan for the future 3 years and predictions of revenue and profits, etc.

3. the framework of the company, including the registered capital, structure of shares or proportion of shares, the organizations of the company, etc.;

4. the plans of preparations for establishment;

5. the names and photocopies of the ID cards of the people involved in the preparations for establishment;

6. a resume of the person-in-charge and a statement of having no record of criminal offence or other bad records that is signed by the said person-in-charge;

7. other materials as required by laws or administrative regulations.

Article 17 The person in charge of preparing for the establishment of an insurance brokering company shall meet the following conditions:

1. having a background of college education or above;

2. having experiences of working in the insurance brokering or other relevant businesses;

3. having no record of criminal offence or other bad records.

Article 18 The CIRC shall, within 30 days after receiving the eligible materials of preparing for establishment, inform the applicant in written form whether to accept the application or not. If the application is rejected, the reasons shall be specified; if it is to be accepted, an examination shall be made according to the present Provisions, and the CIRC shall make a decision within 6 months after the application materials are received on whether to approve the preparations for establishment and inform the applicant in written form of the decision. If the application for preparing for establishment is not approved, the reasons shall be specified.

Article 19 If the application for preparing for establishing an insurance brokering company, a preparation group shall be formed, and the preparations shall be completed within 6 months after the approval is granted. In case the preparations fail to be completed when the time limit expires or the preparations fail to meet the requirement for starting business, the original approval documents shall be invalidated automatically.

An insurance brokering company under preparations may not engage in any insurance brokering business.

Article 20 After having completed the preparations for establishment, the applicant may apply to the CIRC for starting business by submitting the following materials:

1. an application for starting business;

2. the articles of incorporation;

3. the rules for internal management, including the rules concerning the organizational framework, procedures for decision-making, business operations, financial affairs and personnel, etc.;

4. the materials of the senior management personnel submitted for inspection;

5. a name roll of the employees, the photocopies of the CQIBs and ID cards of the employees;

6. the names of the shareholders, photocopies of the business licenses of the legal-person shareholders, financial statements of the legal-person shareholders for the recent 3 years that have been affixed with the financial cachet of the said shareholders, and photocopies of the ID cards of the natural-person shareholders;

7. an asset appraisal report issued by a certified accountants firm, photocopies of the original vouchers for the entering an item of an account of the registered capital;

8. facilities in computer softwares and hardwares;

9. certificates of the use right or ownership of business sites;

10. a Notice of Advance Approval of Enterprise Titles as issued by the competent administration for industry and commerce;

11. other materials as required by the CIRC.

Article 21 The CIRC shall, within 30 days after receiving the eligible materials of application for starting business, carry out relevant checks, and shall decide, within 3 months, whether to approve the application or not and inform the applicant of the decision. If the application is not approved, the reasons shall be specified.

Article 22 The application materials for establishing an insurance brokering company shall be prepared according to the formats as required by the CIRC.

Article 23 An insurance brokering company which is approved to start business shall apply for a Business License for Engaging in the Insurance Brokering Business (hereinafter referred to as "business license") according to relevant provisions.

The insurance brokering companies shall observe the rules for the administration of licenses formulated by the CIRC. Once a business license is issued or changed, a public announcement shall be made in the newspapers designated by the CIRC.

Article 24 Where an insurance brokering company fail to start business without good reasons 6 months after establishment or it suspends business after starting business for 6 consecutive months, the CIRC may cancel the business license thereof.

Article 25 The business license shall be valid for 3 years, and the insurance brokering company shall, 60 days prior to the expiration of the validity period, apply to the CIRC for changing the business license. If the applicant company seriously violates the provisions of any law or administration, the CIRC may refuse to change the business license. If the company fails to have its business license changed by the CIRC, it may not continue to engage in the insurance brokering business.

Chapter III Alteration and Termination

Article 26 The following matters of an insurance brokering company shall be subject to the approval of the CIRC:

1. amending the articles of incorporation;

2. altering the registered capital;

3. changing shareholders;

4. changing the organizational forms;

5. changing the structure of shares;

6. changing the dwelling place;

7. changing any of the senior administrative personnel;

8. changing the scope business;

9. changing the name of the company;

10. being split or merged;

11. being dissolved or bankrupt;

12. other matters that the laws or administrative regulations require to be submitted for approval.

Article 27 In case any insurance brokering company is lawfully dissolved or canceled or bankrupt, it shall hand back the business license thereof to the CIRC and shall make public announcements on the newspapers designated by the CIRC.

Chapter IV Qualifications for Engaging in the Business

Article 28 Any person of an insurance brokering company to engage in the insurance brokering business shall passed the qualifications examinations organized by the CIRC.

Any person with the junior college background shall be allowed to take part in the examinations.

Article 29 Any one who passes the qualifications examinations for the insurance brokering business may apply to the CIRC for a Qualifications Certificate. Any applicant for the Qualifications Certificate shall submit the following documents:

1. certification document proving that the person engaged in the insurance brokering business has passed the qualifications examinations;

2. the ID card or passport (in photocopy);

3. certification materials concerning past acts issued by the entity where the person concerned works or the governments organ on the level of subdistrict office or above where the permanent resident of the person belongs;

4. two recent two-inch photos of the hatless face.

Article 30 Any one who applies for a Qualifications Certificate shall satisfy the following conditions:

1. being 18 years old or older and having full civil capacities;

2. having good morals, being upright and honest, and having good professional ethnics;

3. having no record of criminal punishment or serious administrative punishment within the 5 years prior to the application.

Article 31 The CIRC may directly grant a Qualifications Certificate to any one who satisfies the qualifications as provided by the CIRC for engaging in the insurance brokering business, and the specific measures for this purpose shall be separately formulated.

Article 32 The Qualifications Certificate shall be uniformly printed by the CIRC, and may not be counterfeited, changed, lent, leased or transferred.

Article 33 The Qualifications Certificate shall be the acknowledgement of the basic qualifications of those engaged in the insurance brokering business by the CIRC, it is not valid for proving the qualification for practice. ;

Article 34 The insurance brokering companies shall have requirements for the qualifications to practices of the employees engaged in the insurance brokering business according to the provisions of the CIRC.

Article 35 The Certificate to Practice in the Insurance Brokering Business (hereinafter referred to as "Certificate to Practice") is the certification document for employees to engage in the insurance brokering business.

Article 36 The Certificate to Practice shall be uniformly printed by the CIRC and issued by the insurance brokering companies. No insurance brokering company may issue a Certificate to Practice to any employee who has not obtained a Qualifications Certificate.

Article 37 When doing insurance brokering business, the employees of an insurance brokering company shall actively show their own Certificates to Practice.

Article 38 No insurance brokering company may issue a Certificate to Practice to any one who is punished for violating any of the laws, administrative regulations or rules and is prohibited from entering the insurance brokering business but has obtained a Qualifications Certificate; if any Certificate to Practice is issued, it shall be taken back by the insurance brokering company.

Article 39 If any employee who has a Certificate to Practice stops from doing the insurance brokering business or is reemployed by any other insurance brokering company, he shall hand back the Certificate to Practice to the insurance brokering company.

Chapter V Administration of Business Operations

Article 40 The scope of business operations of the insurance brokering companies shall be subject to the examination and approval of the CIRC. All insurance brokering companies shall conduct their business operations within their ratified scopes of business operations.

Article 41 An insurance brokering company may, upon the approval of the CIRC, engage in the following business operations:

1. making proposals of insurance for the applicant, selecting the insurer and handling the formalities insurance;

2. assisting the insured or the beneficiary to claim for compensations;

3. the business of reinsurance brokering;

4. providing consultative services to clients in terms of avoiding disasters, losses or risk appraisal, risk management, etc.;

5. other businesses as ratified by the CIRC.

Article 42 The businesses that an insurance brokering company is engaged in shall be in conformity with the business scope and geographic area of the accepting insurance company; if such business as coinsurance, cross-regional insurance or all-inclusive policy, etc. is involved, the relevant provisions of the CIRC shall be applied.

Article 43 The personnel residing in any place other than the place of company registration to engage in the insurance brokering businesses, the insurance brokering company shall make registrations according to relevant provisions.

Article 44 An insurance brokering company may not engage in any of the following activities:

1. having insurance brokering connections with any organization or individual that illegally engages in the insurance business or insurance intermediary services;

2. doing business beyond the scope of business as ratified by the CIRC;

3. going beyond the scope of authorization and injuring the lawful rights and interests of the clients;

4. counterfeiting, disseminating false information or injuring the reputation of other business operators in the same trade by other means.

5. embezzling or usurping the premiums or insurance money or insurance compensations;

6. making untruthful publicity to the clients so as to misleading them into applying for insurance;

7. concealing any important information that is related to the contract of insurance or failing to truthfully inform the clients of the assertions of insurance or cheating the applicant, insured or beneficiary;

8. coercing, inducing or limiting the conclusion of insurance contracts by taking advantage of administrative power, post or position or by other unfair means;

9. colluding with the applicant, insured or the beneficiary for the purpose of cheating the insurance company;

10. any other act that is deemed by law or administrative regulation as injuring the interest of the applicant, insured or the insurance company.

Article 45 When doing business, an insurance brokering company shall explicitly inform the clients of the title, address, business scope, legal liabilities, etc. of the insurance brokering company, and telling the clients of the commissions to be charged by the insurance brokering company according to the demands of the clients.

Article 46 An insurance brokering company shall enter into written contracts of mandate with the clients.

Article 47 An insurance brokering company shall open independent accounts for the special use of the funds of the clients.

Article 48 An insurance brokering company shall make detailed records of its brokering businesses, recording the name or title of the clients, the type of insurance brokered, all kinds of insurance money or compensations drawn on other's behalf, premiums paid on other's behalf, the time of fee collection, the time of releasing payment, the amount of commission and the time for paying the commission, etc.

Article 49 An insurance brokering company shall release the payment of insurance premiums due at the agreed time.

Article 50 The insurance brokering company shall charge commissions for the brokering business according to the agreement of both parties.

Article 51 The insurance brokering company shall keep the business secrets that it learns in the process of business operations as confidential.

Article 52 The term for keeping the various materials of business operations by the insurance brokering companies shall be no shorter than 10 years starting from the day when the insurance contract expires.

Article 53 An insurance brokering company shall deposit a caution money for business operations at the rate of 15% of the registered capital or by trade liability insurances according to the provisions of the CIRC.

The insurance brokering company shall, within 30 days after starting business, deposit the caution money for business operations in full amount to the commercial bank designated by the CIRC. An insurance brokering company may, upon approval, pay the caution money for business operations by the securities as approved by the CIRC.

No insurance brokering company may use the caution money paid thereby unless approval of the CIRC is obtained.

Chapter VI Supervision and Inspection

Article 54 The insurance brokering companies shall submit the relevant statements and materials to the CIRC in a timely way according to relevant provisions. The various statements and materials submitted shall be affixed with the signature of the legal representative of the company of the person authorized thereby and with the official cachet of the company.

Article 55 The various statements and materials submitted by the insurance brokering companies shall be true-to-the-fact, precise and complete.

Article 56 All insurance brokering companies shall, within 60 days after each accounting year expires, submit an auditing report issued by a certified accountants firm together with the specifications of other relevant matters to the CIRC.

The certified accountants firm as mentioned in the preceding paragraph shall satisfy the following conditions:

1. It has been established for no less than 3 years and has no bad records;

2. It has sound internal organizations and rules of management;

3. It has 10 certified accounts or more.

Article 57 The CIRC supervises and inspects the business activities of the insurance brokering companies according to law, and the insurance brokering companies shall give coordination and provide relevant materials as demanded.

Article 58 The matters of the insurance brokering companies subject to the inspection of the CIRC shall include:

1. the application and approval documents for establishment or alteration;

2. the registered capital;

3. the caution money for business operations and the insurance for liabilities of the trade;

4. business management;

5. financial status;

6. the information system;

7. management and internal control;

8. the qualifications for the senior management personnel;

9. other matters which the CIRC thinks to be necessary for inspection.

Chapter VII Provisions of Punishment

Article 59 Any one who violates the present Provisions by illegally establishing an insurance brokering company shall be canceled and be fined not less than 100,000 yuan but not more than 500,000 yuan; if illegal proceeds have been incurred, such proceeds shall be confiscated.

Article 60 In case any applicant who obtains the approval of the CIRC for preparing for establishment or for starting business by submitting false materials or by other fraudulent means, the qualifications for preparing establishment or the business license thereof shall be canceled, and the offender shall be fined not less than 100,000 yuan but not more than 500,000 yuan.

Article 61 Any insurance brokering company that is merged, split, dissolved or bankrupt without the approval of the CIRC shall be given a warning and shall be fined not less than 50,000 yuan but not more than 300,000 yuan; if the circumstances are serious, the scope of business of the company shall be restricted or the company shall be ordered to suspend business or the business license of the company shall be revoked.

Article 62 Any insurance brokering company that changes its name or articles of incorporation or registered capital or structure of capital or shareholders shall be given a warning and be fined not less than 10,000 yuan but not more than 10,000 yuan.

Article 63 Any insurance brokering company that commits any of the following activities shall be given a warning and be fined not less than 10,000 yuan but not more than 100,000 yuan:

1. appointing any of the senior management personnel whose qualifications for holding the position have not examined and approved by the CIRC;

2. appointing any of the senior management personnel by way of temporary person-in-charge without the approval of the CIRC;

3. any of the temporary person-in-charge is appointed upon the approval of the CIRC due to special circumstances but the actual tenure of office has exceeded three months;

4. failing to report any of the decisions or appointing any of the senior management personnel or decisions of giving disciplinary punishments to any of the senior management personnel to the CIRC according to relevant provisions.

Article 64 Any insurance brokering company that conducts business beyond its ratified scope of business conducts business in other places as against the present Provisions shall be given a warning and be fined not less than 100,000 yuan but not more than 500,000 yuan; if the circumstances are serious, the scope of business of the company shall be restricted or the company shall be suspended form business or the business license of the company shall be revoked.

Article 65 Any insurance brokering company under preparation for establishment is engaged in the insurance brokering business shall be given a warning and be fined not less than 100,000 yuan but not more than 500,000 yuan; if any illegal proceeds have been incurred, such proceeds shall be confiscated; if the circumstances are serious, the qualifications for preparations shall be canceled.

Article 66 Any insurance brokering company has insurance brokering business connections with any organization or individual that is illegally engaged in the insurance business or insurance intermediary services shall be given a warning and be fined not less than 5 times but not more than 10 times the illegal proceeds.

Article 67 Any insurance brokering company that issues Certificates to Practice as against the present Provisions shall be given a warning and be fined not less than 10,000 yuan but not more than 50,000 yuan.

Article 68 Any insurance brokering company that coerces or induces or restricts conclusion of insurance contracts of other people by taking advantaging of its administrative power, office or trade or by other unfair means shall be given a warning, and be fined not less than 100,000 yuan but not more than 500,000 yuan; if any illegal proceeds have been incurred, such proceeds shall be confiscated; if the circumstances are serious, the company shall be ordered to suspend business or the business license of the company shall be revoked.

Article 69 Any insurance brokering company that violates the present Provisions by embezzling or usurping any of the insurance premiums or insurance money or compensations shall be given a warning and be fined not less than 100,000 yuan but not more than 500,000 yuan; if the circumstances are serious, the company shall be ordered to suspend business or the business license of the company shall be revoked.

Article 70 In case any insurance brokering company that colludes with its clients in an effort to snare insurance money, the illegal proceeds shall be confiscated and the company shall be fined not less than 1 time but not more than 3 times the amount of illegal proceeds; if the circumstances are serious, the company shall be ordered to suspend business or the business license thereof shall be revoked.

Article 71 Any insurance brokering company that disseminates false information in its business operations, injures the reputation of other people and causes bad effects shall be given a warning and be fined not less than 10,000 yuan but not more than 50,000 yuan.

Article 72 Any insurance brokering company that goes beyond its scope of business and injures the lawful rights and interests of its clients or colludes with other people in an effort to cheat its clients shall be given a warning and be fined not less than 10,000 yuan but not more than 100,000 yuan; if the circumstances are serious, the company shall be ordered to suspend business or the business license thereof shall be revoked.

Article 73 Any insurance brokering company that make false contributions of registered capital or draws out its registered capital shall be ordered to suspend business and be fined not less than 100,000 yuan but not more than 500,000 yuan; if the circumstances are serious, the business license thereof shall be revoked.

Article 74 Any insurance brokering company that provides false financial statements or materials or provides financial statements or materials that conceals important facts to the regulatory department shall be given a warning and be fined not less than 100,000 yuan but not more than 500,000 yuan; if the circumstances are serious, the company shall be ordered to suspend business or the business license thereof shall be revoked.

Article 75 Any insurance brokering company that discloses false or unreal information to its clients, misleads clients to apply for insurance, or conceals from clients important information relating to the insurance contract, or fails to inform the clients truthfully of the assertions of the insurance company, or cheats the applicant, insured or the beneficiary, shall be given a warning and be fined not less than 10,000 yuan but not more than 50,000 yuan; if the circumstances are serious, the company shall be ordered to suspend business or the business license thereof shall be revoked.

Article 76 Any insurance brokering company that fails to open accounts according to the relevant provisions shall be given a warning and be fined not less than 10,000 yuan but not more than 100,000 yuan; if the circumstances are serious, the scope of business of the company shall be restricted, or the company shall be ordered to suspend business or the business license shall be revoked.

Article 77 Any insurance brokering company that fails to deposit its caution money for business operations or fails to buy insurance for liabilities of the trade shall be given a warning and be fined not less than 10,000 yuan but not more than 100,000 yuan; if the circumstances are serious, the company shall be ordered to suspend business or the business license shall be revoked.

Article 78 Any employee of an insurance brokering company that is directly responsible for any violations of the present Provisions may, according to the seriousness of the circumstances, be given a warning or be dismissed or the Qualifications Certificate thereof shall be revoked.

Article 79 Any of the senior management personnel of an insurance brokering company that is directly responsible for any violations against the present Provisions may, according to the seriousness of the circumstances, be disqualified from holding posts for a certain period of time or for his whole life.

Article 80 Any one who violates the present Provisions by refusing or impeding the lawful supervision or inspection of the CIRC shall be given a warning and be fined not less than 100,000 yuan but not more than 500,000 yuan; if the circumstances are serious, the company shall be ordered to suspend business or the business license thereof shall be revoked.

Chapter VIII Supplementary Provisions

Article 81 The present Provisions shall be applied to the establishment of foreign-capital insurance brokering companies within the territory of the People's Republic of China. If there are different provisions in laws, administrative regulations or relevant international treaties to which China has acceded, such provisions shall prevail.

Article 82 All materials that are required to be submitted to the CIRC shall provided in Chinese.

Article 83 The power to interpret and amend the present Provisions shall remain with the CIRC.

Article 84 The present Provisions shall take effect as of January 1, 2002. If there are any different provisions in any provisions relating to the administration of insurance brokering companies promulgated prior to the present Provisions, the present Provisions shall prevail.

Promulgated by The China Insurance Regulatory Commission on 2001-11-16