Non-admitted insurance: Prohibited. Insurance can only be placed with a company licensed to conduct business in China.
Premium tax paid by insured: None known. But insurers pay a 5% business tax to the government based on net income. There are also local taxes that vary by region/city ranging from 0% to 0.5%.
Regulator: The Chinese Insurance Regulatory Commission (CIRC).
Overview: The Chinese insurance marketplace continues to evolve and modernise. The CIRC is an active regulator. Major Chinese insurers are developing an appetite and expertise in global property programmes although compulsory insurance is not widely enforced. The ‘big three’ Chinese insurers hold a market share of 67.5%. Singapore has developed as an insurance servicing hub, with about 30 established reinsurers.
Individuals and organisations requiring insurance in China should buy it from local insurance companies. Non-admitted insurance contracts are void in China and therefore unenforceable. If a non-admitted insurer writes insurance, the CIRC can confiscate the illegal income and impose fines on the offending company. There are no explicit penalties laid out for the insured.
Insurance brokers are allowed to provide services throughout China.
Overall risk rating: medium
