BEIJING, Jan. 9 (Xinhua) -- The China Banking and Insurance Regulatory Commission (CBIRC) recently unveiled a guideline to further expand the opening-up of the country's insurance industry.
Experts here believed that the new favorable policy will boost the business growth foreign insurance companies China and benefit domestic insurance industry as well.
Highlighting high quality development of the banking and insurance industry, the guideline put forward a target of achieving opening-up at a higher level, which includes deepening the opening-up of the banking and insurance industries, introducing advanced international professional institutions, and supporting domestic banks and insurance institutions to "go global".
Opening up the insurance industry has been a key task actively promoted by the CBIRC in the past two years. Since April 2018, the CBIRC has released 14 measures on further opening up the insurance industry. They include relaxing or removing the restrictions on proportion of foreign shares, relaxing the restrictions on the total assets, operating terms, shareholder qualifications of foreign-funded institutions.
In December 2019, the CBIRC confirmed that starting from January 1, 2020, the proportion of foreign ownership in life insurance joint ventures can reach 100 percent.
Zhu Junsheng, deputy director of the insurance research office of the Development Research Center of the State Council, predicted that with the implementation of the opening-up measures, foreign insurers, especially life insurers, will accelerate expanding business in China.
With the upgrading of foreign insurance companies' penetration into the Chinese insurance market, their prudent management philosophy will gradually exert a growing influence, and their experience in long-term insurance business will produce a spillover effect, which will promote the transformation and high-quality development of the Chinese insurance market, Zhu added.
Zhu also noted that as the limit on the ratio of foreign equities in life insurance companies are relaxed, foreign capital will enter Chinese life insurance market in a more flexible form, which will stimulate foreign life insurers to expand business in China, where foreign insurance companies seize a relatively limited market share at present.
Encouraged by the favorable policies, foreign capital has accelerated its steps in entering Chinese insurance market.
In November 2019, the CBIRC approved the establishment of Allianz (China) Insurance Holding Company Limited, the first wholly foreign-owned insurance holding company in China; in December 2019, AXA announced its acquisition of the remaining 50 percent stake in AXA Tianping Property & Casualty Insurance Co. Ltd., making it the largest wholly foreign-owned property insurance company in China; in the same month, AIA Company Limited announced its intention to convert its Shanghai branch into a wholly-owned subsidiary of AIA.
Wang Guojun, a professor at the School of Insurance and Economics affiliated to the University of International Business and Economics, pointed out that foreign insurers will bring better management, products and service to the Chinese insurance industry.
He held that both insurance and banking sectors will be opened up wider to foreign capital with the implementation of some related documents that have been released.
With the gradual opening-up of the insurance industry, there will be a rising number of competitors in the Chinese insurance market, which also puts forward higher requirements for the regulatory authorities.
Zeng Gang, deputy director of the National Institution for Finance and Development, noted that while orderly opening up wider to the outside world, China's finance insutry should ensure the stability of the financial system and align its regulatory rules with international practices. (Contributed by Wang Huyun, Zhang Siwen; edited by Yang Qi)
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