Directors to be Responsible for Managing Insurance Firms’ Compliance

Boards of directors of insurance companies will soon have to assume responsibility for managing their firms’ compliance.

The Guidelines for Compliance Management of Insurance Companies (Guidelines), issued on September 20, 2007, by the China Insurance Regulatory Commission (CIRC), stipulate that insurance companies must appoint responsible officials and establish compliance management departments. The officials, as senior managers of the parent insurance companies, must not manage their firms’ business and financing departments at the same time. In addition, the insurance companies must work out compliance policies, and report their policies to CIRC, for recording, after they have been approved by their firms’ boards of directors.

The insurance companies must submit, prior to April 30 every year, their annual compliance reports, for the previous year, to CIRC. The boards of directors of the companies must be responsible for the authenticity of the reports.

The Guidelines will take effect on January 1, 2008.

Source: China Insurance Regulatory Commission