People’s Republic of China: Financial Sector Assessment Program- Detailed Assessment of Observance of the Insurance Core Principles

IMF Staff Country Reports, December 26, 2017

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Canonical URL: People’s Republic of China: Financial Sector Assessment Program- Detailed Assessment of Observance of the Insurance Core Principles

This paper presents an assessment of the level of observance of the Insurance Core Principles (ICPs) in China.
Overall assessment: the Chinese regulatory system is assessed to have a good level of compliance with the ICPs.
The regulatory framework includes, in addition to the solvency standards, extensive requirements on corporate governance, risk management and internal controls as well as on reinsurance, disclosure and conduct of business.
Application: All these requirements are applied appropriately to the significant number of large insurance groups, which together account for the bulk of premium income.
Remaining gaps: There is scope for further development of crisis preparedness and market conduct work.

Regulatory coverage:
- Solvency standards are in place.
- Extensive requirements on corporate governance, risk management, and internal controls.
- Requirements on reinsurance, disclosure, and conduct of business.
Application and market structure:
- Requirements are appropriately applied to the significant number of large insurance groups.
- These large insurance groups together account for the bulk of premium income.
Areas for improvement:
- Crisis preparedness requires further development.
- Market conduct work requires further development.

Strengthen crisis preparedness frameworks for the insurance sector.
Enhance market conduct supervision and related work to address remaining gaps in consumer protection and behavior oversight.
Continue applying and enforcing existing solvency, corporate governance, risk management, internal controls, reinsurance, and disclosure requirements across large insurance groups that account for the bulk of premium income.