The China Banking and Insurance Regulatory Commission proposed a revision of rules that manage foreign-funded insurers.
The regulator said in a May 30 release that when forming a foreign-funded life insurance joint venture, a foreign insurance company can hold up to 51% of the company, up from a maximum of 50%.
Further a major foreign insurer shareholder will not be allowed to transfer its shares for five years after acquisition. There are no such restrictions currently.
The CBIRC added a major shareholder of a foreign-funded insurer should continue to ensure the company meets solvency requirements and replenish capital when necessary, even when it wants to reduce its exposure or exit from the Chinese market.
The watchdog will hear feedback on its proposed rules until June 29.
In China, foreign insurers have already been allowed to hold full ownership of local property and casualty insurance companies. The CBIRC's latest announcement follows the country's recent program to further open up its financial sectors, including potentially removing in three years the cap on foreign ownership for securities companies, fund managers, futures companies and life insurers.
