Regulator raises the bar on insurance shareholders
New rules tighten verification of controlling shareholders, strictly assess their background, work experience and business record
China’s insurance regulator has released a new management measure regarding the equity of insurance companies which alters the controlling shareholder threshold, The Paper reported.
According to the new rule set by the China Insurance Regulatory Commission, shareholders holding one-third of the company’s stakes are considered to be controlling shareholders, compared to the previous standard of “holding more than 30% of the total stakes.”
The new regulation also puts forward more stringent requirements on the financial status of shareholders and their capital contribution capabilities.
In particular, regulators toughened the verification of controlling shareholders, strictly assessing their industry background, working experience, business record and previous investments, so as to make sure they possess the risk management capacity and prudent investment concepts.
The new rule will take effect on April 10, 2018.