China Insurance Law Practice 2023 Overview



Over the past decade, China’s insurance industry has grown rapidly and held the second-largest share of the global premium market for many years, contributing steadily to the global insurance market. In 2022, despite the repeated impact of the pandemic and turbulent capital markets, China’s insurance industry has been tested and seen new developments with the introduction of various favorable policies, such as the startup of pension and green insurance and the continued “popularity” of A&D liability insurance.

Based on data released by the China Banking and Insurance Regulatory Commission (CBIRC) on its official website on January 11, 2023, in November 2022, the initial insurance premium income of insurance companies reached 635 billion, with a 4.95% year-over-year increase. year; claims and benefits paid amounted to USD 192 billion, down 0.60% year-on-year; total insurance industry assets reached $3.9 trillion; the net assets of the insurance sector reached 398 billion USD.


As China’s aging process accelerates, new countermeasures to solve the problem of helping the elderly are being introduced. 2022 is the starting year for the development of the personal pension system in China. In April, the General Office of the Council of State published Opinions on promoting Persona developmentl Pensions, announcing for the first time a complete institutional framework. Subsequently, the State Revenue Service, CBIRC and other government agencies issued supporting pilot rules to assist the personal retirement system from the perspective of personal tax incentives and retirement insurance products. .

For example, the CBIRC has published The opinion on the launch of the commercial pension pilot activity of pension insurance companies in December, allowing four pension insurance companies to launch pilot activities in ten provinces (cities), including Beijing, where pension insurance companies can provide their customers with one-stop services such as account management, retirement planning, fund management and risk management.

Meanwhile, the insurance industry has an inherent advantage in the way of personal retirement. Insurance funds have the characteristics of large scale, long term and stability. Insurance companies generally manage the additional funds generated by retirement products through their asset management subsidiaries. Insurance asset management companies can overcome market volatility to some extent and achieve investment returns in terms of liability demand and absolute returns that are well consistent with the characteristics of long-term funds like pensions. Therefore, insurance asset management products are an indispensable support for improving the individual retirement financial system.


In 2022, the CBIRC issued The guidelines on green finance for the banking and insurance sector and the communication on the statistical system of green insurance activities, defining “green insurance” for the first time at the institutional level. It requires insurance institutions to focus on environmental, social and governance (ESG) risks in the areas of organizational management, system building, internal control management and information disclosure. In addition, insurance institutions should use the results of the ESG assessment as an important basis for cost management and investment decisions, and apply differentiated rates according to the risk profile of their clients.


Over the past three years, D&O liability insurance in the A-share market continues to be popular. According to the incomplete statistics of a China Securities Journal reporter, a total of 337 A-listed companies announced the purchase of D&O liability insurance in 2022, and the number of insured companies increased by 36% by one year to the next.

The large increase in the insured rate is partly due to the representative litigation system created by the revised PRC Securities Law, which opened the door to class action lawsuits on A-share securities and significantly increased the risk litigation for A-share listed companies and their directors and officers. The judicial practice of class actions such as the Kangmei Pharmaceuticals case, the Luckin Coffee case, the Feilo Acoustics case and the Huifeng Joint Stock case, has taken the liability risks of directors and officers to reality.

On the other hand, as regulators continue to step up efforts to investigate and sanction information disclosure irregularities, in the first 11 months of 2022, 56 listed companies were investigated. from the China Securities Regulatory Commission (CSRC) for alleged information disclosure violations. , a number 65% higher than the same period last year. In addition, the revised PRC Securities Law also strengthens regulatory constraints on “minority control” by expanding the scope of persons who have disclosure obligations and strengthening the disclosure obligations of directors and officers. There has been a sharp increase in civil litigation involving misrepresentation or the disclosure of illegal information, and there is a positive correlation between litigation risk and demand for A&D liability insurance.

In addition, the number of D&O liability insurance claims and potential claims for A shares increased significantly in 2022. Given the long-term nature of D&O liability insurance claims, it is expected that more potential claims are converted into actual claims in 2023. With the rise in litigation risk faced by listed companies and the increase in D&O liability claims, the increase in D&O liability insurance premiums is an inevitable trend.

Meanwhile, due to the Covid-19 pandemic and geopolitical turmoil, China’s insurance market has also felt unprecedented pressure over the past year, and these factors have led to more litigation. insurance, in areas such as business interruption insurance, credit and warranty insurance, professional liability insurance, and even co-insurance and reinsurance.

V. Conclusion

Generally speaking, the Chinese insurance market and regulations are undergoing considerable change. With the relaxation of China’s epidemic prevention policy and the recovery of the national economy at the end of 2022, it is expected that the Chinese insurance and legal services market will face more opportunities and challenges in 2023. .



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