By Shangguan Zhoudong (chinadaily.com.cn)
Updated: 2007-08-09 15:15

The combined level of foreign ownership of a domestic insurance firm must be under 25 percent, while a single foreign investor can own no more than 20 percent, according to a draft rule published by the China Insurance Regulatory Commission (CIRC), the Securities Times reported today.

The CIRC plans to issue additional requirements for prospective foreign investors in the domestic insurance segment, including assets totaling at least US$2 billion in the year prior to the investment.

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Foreign financial investors must also have an "A" rating or above for the previous three years by an international rating company, as well as overall profitability over those three fiscal years.

Investors will be required to use self-owned capital rather than bank loans in making the investment, and they cannot transfer their stakes in domestic insurers for three years, according to the draft rule.

Investors are not allowed to invest in domestic insurers by entities, intellectual property, usufruct of land and other non-currency assets.

The alteration of an insurer's registered capital, contributors and shareholders with more than 10 percent (10 percent included) stake, should be reported to the CIRC for approval, according to the draft measure.