How Foreign Insurers Set Up Non-insurance Subsidiaries In China ?

I. Purposes for setting up a non-insurance subsidiary

An obvious fact for foreign insurers is that they are not allowed to conduct insurance business within the territory of China (excluding jurisdiction as Hong Kong, Macau and Taiwan for the purpose of this article), nor can their Chinese non-insurance subsidiaries which do not possess any insurance licenses. Additionally, the establishment of a Chinese insurance company will be subject to strict review and must be approved by the Chinese insurance regulator (i.e. the Chinese Banking and Insurance Regulatory Commission).

However we observed that more and more foreign insurers (esp. reinsurers) are setting up or exploring the opportunity to set up non-insurance subsidiaries in China. Why is that? Based on our experience, the following may offer stimuli for foreign insurers to take such steps: