1. Form of enterprise establishment

Foreign non-life insurers will be permitted to establish themselves as branches or joint ventures (JV) with 51 percent foreign ownership. Within two years of China's World Trade Organization (WTO) accession, foreign, non-life insurers will be permitted to establish wholly owned subsidiaries, i.e., with no establishment restrictions.

Upon the accession, foreign life insurers will be permitted a 50-percent foreign ownership in a JV with a partner of their choice. For insurance brokerages, JVs with a foreign equity up to 50 percent will be permitted. Within three years of China's accession, foreign equity shares will jump to 51 percent, and within five years, wholly foreign-owned subsidiaries will be permitted.

For large-scale, commercial-risk insurance brokerages and re-insurance brokerages, including international marines, aviation and transport insurance brokerages, upon the WTO accession, JVs with foreign equity of no more than 50 percent will be permitted. Within three years of China's accession, foreign equity shares will climb to 51 percent, and within five years, wholly foreign-owned subsidiaries will be permitted.

The internal branching of an insurance firm will be permitted in line with the phasing out of geographic restrictions.

2. Geographic Coverage

Upon the WTO accession, foreign life and non-life insurers will be permitted to provide services in Shanghai, Guangzhou, Dalian, Shenzhen and Foshan. Within two years of China's accession, foreign life and non-life insurers will be permitted to offer services in the following cities: Beijing, Chengdu, Chongqing, Fuzhou, Suzhou, Xiamen, Ningbo, Shenyang, Wuhan and Tianjin. Within three years of China's accession, there will be no geographical restrictions.

3. Business Scope

Upon the WTO accession, foreign, non-life insurers will be permitted to provide "master policy" insurance of large-scale commercial risks without geographical restrictions. Foreign, non-life insurers are permitted to provide insurance to enterprises abroad, as well as property insurance, related liability insurance and credit insurance to foreign-invested enterprises in China upon accession. Within two years of China's accession, foreign, non-life insurers will be permitted to provide a full range of non-life insurance services to both foreign and domestic clients.

Foreign life insurers are permitted to provide individual (not group) insurance to foreigners and Chinese citizens. Within three years of the accession, foreign insurers will be permitted to provide health insurance, group insurance and pension/annuities insurance to foreigners and the Chinese.

On accession, foreign insurers will be permitted to provide re-insurance services for life and non-life insurance as a branch, JV, or wholly foreign-owned subsidiary without geographical or quantitative restrictions on the number of licenses issued.

4. Licenses

On accession, licenses will be issued without quantitative limits. Qualifications for establishing a foreign insurance institution are as follows:

--The investor will be a foreign insurance company with more than 30 years of experience with a WTO member;

--It will have a representative office for two consecutive years in China;

--It will have total assets of more than US$5 billion at the end of the year prior to application (except for insurance brokers).

Insurance brokers will have total assets of more than US$500 million. Within one year of the accession, they will have total assets of more than US$400 million. Within two years of the accession, they will have total assets of more than US$300 million, and within four years, they will have overthan US$200 million in assets.

5. Other Restrictions

At present, a 20-percent cession of all lines of primary risks for non-life, personal accident and health insurance businesses with an appointed Chinese re-insurance company will be required; this ratio will remain unchanged upon the WTO accession. One year after the accession, 15 percent will be required; two years after the accession, 10 percent ; three years after, five percent and four years after the accession, no compulsory cession will be required. Foreign insurance institutions will not engage in the statutory insurance business

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