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Foreign investors are permitted to operate loss adjusting business in China

12.07.2018 Corporate & Commercial , Finance

Fei Mao

Fei Mao Partner

On 19 June 2018, China Banking and Insurance Regulation Commission (“CBIRC”) issued Notice on Permitting Foreign Investors to Operate Loss Adjusting Business in China (“FILA Notice”).

Previously, foreign investors were not permitted to operate loss adjusting business in China, but only allowed to invest in no more than 25% of the shares of loss adjusting entities owned by Chinese companies/individuals.

Such restrictions have now been removed by FILA Notice. The Notice permits foreign loss adjusters, who have operated loss adjusting business outside China for over 3 years, to establish a “foreign-invested insurance adjuster” (FILA) in China. The Notice further permits foreign-invested insurance companies, who have operated insurance business in China for over 3 years, to establish a FILA. FILAs shall make business filing and operate the loss adjusting business in accordance with Provisions on Supervision and Administration of Insurance Adjusters (2018).

FILA Notice significantly opens up China’s loss adjusting market to foreign investors. It means that foreign investors would be treated exactly the same way as Chinese investors on both establishment and operation of loss adjusters in China.  It is a major step-forward in China Reform and Opening policy.

Article authors:

Fei Mao