On July 15, 2016, the China Insurance Regulatory Commission issued the Circular on Further Enhancement of Equity Information Disclosure by Insurance Companies (hereinafter, the “Circular”) to further strengthen public supervision and the transparency of the review process, and regulate the establishment and equity changes of insurance companies. The Circular is highlighted below:
The first portion stipulates the obligation of insurance companies and investors to disclose information. The information to be disclosed pursuant to the Circular shall be true, accurate and complete without any misrepresentation, misleading statement or material omission.
The second portion deals with the contents of disclosed information. With respect to registered capital arrangements and changes to shareholders with more than 5% shares, an insurance company is required to disclose such information on its official website and on the website of the Insurance Association of China. The information to be disclosed includes the decision-making process, the actual status of the capital injection arrangements or shareholder changes, the declaration regarding source of funding, explanation on the relations among shareholders and other information required for disclosure by the China Insurance Regulatory Commission for the sake of prudent supervision.
The third portion relates to the timing of information disclosure, which is 10 working days after a relevant resolution is adopted in a shareholders’ meeting or in a board meeting.
Insurance group (holding) companies and insurance asset management companies shall be administrated in the same manner as insurance companies. The Circular became effective on the day of its issuance.