First Life Insurance Joint Venture Launched

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Last updated at: (Beijing Time) Monday, December 17, 2001

First Life Insurance Joint Venture Launched

Heng'an Life Insurance Co., the first life insurance company authorized to set up a joint venture with overseas investors since China joined the World Trade Organization last week, was launched Sunday in Tianjin.

China speeding up opening to outside world

Speaking at the opening ceremony, Feng Xiaozeng, vice-chairman of the China Insurance Regulatory Commission, said the establishment of the company indicated the beginning of a period when China would speed up its opening to the outside world.

Four life insurance companies approved to set up life insurance joint ventures with overseas investors

In October last year, the Chinese government approved the applications of four life insurance companies which plan to set up life insurance joint ventures with overseas investors, including the newly established Heng'an.

Heng'an is the first of the companies to start operation. The other three companies are Minsheng Life Insurance Co. in Beijing, and the Dongfang Life Insurance Co. and Shengming Life Insurance Co. in Shanghai.

About Heng'an

Hu Liyun, Heng'an's board chairperson, said Heng'an is a national share-holding company set up by 11 shareholders, including the Tianjin Economic and Technological Development Group Co. with a registered capital of 651 million yuan (79 million U.S. dollars).

Hu said the company will step up its efforts to set up a life insurance company with overseas investors to enter the life insurance market in China.

Total business volume: RMB 160 billion yuan

Feng said that the industry reemerged in China in 1980, and by the end of last year over 40 insurance companies had been established with a total business volume of 160 billion yuan ( nearly 20 billion U.S. dollars).

CIRC approved fourth life insurance company

The China Insurance Regulatory Commission (CIRC) approved the establishment of Minsheng Life Insurance Shareholding Co. It is the fourth life insurance company to win CIRC approval. Dongfang Life, Shengming Life and Heng'an Life are the other three companies that were recently approved. (ChinaOnline, 31 October, 2000)

China Insurance Regulatory Commission (CIRC)

Functions and Responsibilities: The CIRC formulates and enforces related laws and regulations; oversees insurance business and operations; protects the interests of policy holders; develops the insurance market, maintains order in it and ensures fair competition; promotes insurance industry reform and restructuring; and sets up a risk evaluation and advance warning system to minimize insurance risk.

Because many firms were making up losses in their life insurance business by borrowing from their property insurance business, the CIRC decreed in 1999 that insurance companies could no longer handle both property and life insurance. Accordingly, the CIRC divided the PICC Group into property, life and reinsurance, which became the respective responsibilities of the new PICC Property, the Life Insurance Co. of China, and the China Reinsurance Co.(CRC). With regard to foreign firms in China, to which the decree also applied, the commission additionally declared that while property insurance firms may be wholly foreign-funded because the business is short-term in nature, life insurance, which is fixed, requires a Chinese partner to form a joint venture. In detail

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