China agent business to be liberalized: CIRC

BEIJING, China—Chinese insurance agent business will be liberalized at the end of this year, according to a China Insurance Regulatory Commission official.

Foreign investors will be allowed to set up their own insurance agent companies, including insurance brokerages from the end of 2006, said Meng Zhaoyi, head of the CIRC international department.

Foreign investors will not, however, be allowed to solely fund a life insurance company in China, said Mr. Meng.

The current 50% limit on foreign stakes in a life insurance company will not be changed.

According to the CIRC, since China joined the World Trade Organization five years ago, 47 foreign insurance companies have set up 121 branches in China, with 135 more establishing 200 representative offices.

Revenues of foreign insurance companies in the country reached 34.1 billion yuan ($4.35 billion) in 2005, some nine times more than in 2001, said CIRC.

Foreign insurance companies held a 7% market share in China at the end of 2005, up from 5.3% in 2001, added the regulator.

In the more international cities they have a higher share, with 19% of the market in Beijing in 2005 and 17% in Shanghai.