China is considered as one of the growing insurance
markets in the world in these days. In 2016, the China Insurance Regulatory
Commission (CIRC) issued the Outline of the 13th Five-Year
Development Plan of the Chinese Insurance Industry. The Outline defines the
guiding ideology, development targets, priority missions and new policies in
the insurance market.
The Chinese legal system is based on civil law system.
These include the following:
PRC Insurance Law
Judicial explanations issued by Supreme People’s Court
Other relevant laws developed by the National People’s
Regulations and guidelines issued by the CIRC and other
relevant government institutions.
The Insurance Regulation in China is intended to
protect the insured and beneficiaries under the policy and enhancing the
development of the insurance market. CIRC has stressed the importance of
compliance with the rules regarding:
The market behaviors in the insurance industry.
Promotion of insurance policies.
The insurer’s solvency and capital adequacy ratio.
Conduct rules concerning the market behavior of insurance
Regulatory Controlling Bodies
The China Regulatory bodies
are divided into governing body and provinces. The provinces are allowed to
develop and accept laws that are intended for only that province and have local
of insurance and reinsurance contracts
There are some differences
between Insurance and Reinsurance contracts. An insurance contract is an
agreement between an applicant and an insurer that sets out the rights and
obligations under the insurance policy. “Reinsurance contract” is not defined
by the PRC Insurance Law. The difference is caused by the difference of the
contractual parties. The Insurance contract is between an applicant and an
insurer, while reinsurance is between two insurers. Therefore, the insurance
contract is based on property or life insurance and the reinsurance contract
reinsures some part of the risk of other insurance contract.
of Insurers and Reinsurers
All insurers and reinsurers
are treated in the same way and they should comply to the same rules that are
carefully developed by the CIRC. Still, there are some other regulations for reinsurance
companies that must be considered as well.
for the insurance and reinsurance intermediaries
The agents’ actions must comply with the CIRC regulations and
reports. The regulations include:
Change of its name or the name of
Change of its domicile or the place
of business of its branches.
Change of the names of its
initiators, major shareholders or capital contributors.
Change of its major shareholders or
Material change to its equity
structure or proportion of capital contribution.
Change of its registered capital or
Modification of its articles of
association or partnership agreement.
The division, merger or dissolution
of the entity, or changes to its organizational form.
Closure of its branches.
general form and content requirements for insurance policies
The PRC Insurance Law does
not set specific form and content requirements for insurance policies. In
practice, an insurance contract in China consists of an application form,
policy, schedule, and endorsements.
Regulations in Germany
The German laws governing the insurance intermediation
activities were changed in 2007. These changes were conditioned by the EU
Insurance Mediation Directive, which was implemented in accordance with the
relevant definitions and regulations.
There is no statutory definition of an insurance
contract. However, in numerous decisions, dating back as far as 1964, the
German Federal Court held that an insurance agreement exists if the following requirements
A business promises, for value, to render a certain
performance if an uncertain agreed event occurs.
The assumed risk is spread among numerous persons who are
subject to the same risk.
The assumption of the risk by the insurer is based on
calculations following the law of large numbers.
The assumption of the risk is the primary obligation under
Insurance and reinsurance activities are primarily
regulated by the German Insurance Supervision Act, which contains licensing,
continuing oversight, and liquidity and eligibility requirements
for insurance providers. Against the background of the implementation of the
Directive 2009/138/EC on the taking-up and pursuit of the business of insurance
(Solvency II Directive) in German law, the German Insurance Supervisory Act has
been amended with effect from 1 January 2016.