China Net Finance and Economics, January 20 (Reporter Guo Weiying) Recently, Dinghe Property & Casualty Insurance Co., Ltd. (hereinafter referred to as "Dinghe Insurance") released the information disclosure report of material related party transactions No. 1 in 2022. According to the report, the material related party transaction involved a relevant insurance contract signed by Dinghe Insurance and the related parties of the shareholders, involving a premium amount of about 1 billion yuan.
In response to the cumulative realization of premium income through related party transactions, Dinghe Insurance told the financial reporter of China Net that the company actively developed the market business while deeply cultivating the shareholder business, and achieved a premium income of 5.26 billion yuan in 2021, of which related party transactions accounted for about 47%, the market business accounted for 53%, and the market business grew by 13% year-on-year.
Hao Chen, an associate professor at the China Institute of Corporate Governance and Business School of Nankai University, told the financial reporter of China Net that data analysis shows that the level of related party transactions of mainland insurance companies has shown an overall downward trend since 2016. From the perspective of the entire insurance industry, insurance companies' related party transactions are too high, which may not only infringe on the interests of small and medium-sized shareholders, but also affect the interests of insurance consumers. He also suggested that in order to control the scale of related party transactions of insurance companies, the role of independent directors and relevant special committees can be fully utilized at the insurance company level.
In 2021, the premiums realized by related party transactions will account for about 47%
According to the past practice, Dinghe Insurance will issue No. 1 material related party transactions at the beginning of the new year, which are related insurance contracts signed with shareholders and related parties.
Judging from the No. 1 major related party transaction report in 2022, Dinghe Insurance signed a series of property insurance and personal insurance for 2022 with Yunnan Power Grid, Guizhou Power Grid, Hainan Power Grid, Shenzhen Power Supply Bureau, China Southern Power Grid Ultra High Voltage Transmission Company, China Southern Power Grid Peak Regulation and Frequency Regulation Power Generation Company, including all insurance for power grid property, power grid machine damage insurance, power plant property all insurance, power plant machine damage insurance, power supply liability insurance, public liability insurance, drone comprehensive insurance, construction project all insurance, Group personal accident insurance, group critical illness insurance, group hospitalization supplementary medical insurance, group outpatient emergency medical insurance, group critical illness medical insurance, etc. The above insurance contract is effective on January 1, 2022 and expires on December 31, 2022.
Compared with the No. 1 material related party transaction in 2021, the premium amount involved in the No. 1 material related party transaction in 2022 increased by 14.76% year-on-year.
At the same time, from the perspective of annual information, the premium income involved in the major related party transactions disclosed by Dinghe Insurance in 2021 was 2.144 billion yuan. In addition, as of now, Dinghe Insurance has disclosed the related party transaction information for the first three quarters of 2021. According to statistics, the premium income realized through related party transactions in the first three quarters of 2021 was 2.427 billion yuan.
In addition, the premium income involved in the major related party transactions disclosed by Dinghe Insurance in 2020 was 1.878 billion yuan, and the premium income realized by the quarterly related party transactions was 2.286 billion yuan. The premium income involved in the major related party transactions disclosed in 2019 was 2.168 billion yuan, and the premium income realized by the quarterly related party transactions was 2.315 billion yuan.
Dinghe Insurance told the financial reporter of China Net that related party transactions include major related party transactions, of which related party transactions are disclosed on a quarterly basis, and major related party transactions are disclosed within 15 working days after the occurrence. At the same time, according to the data disclosed by Dinghe Insurance, from 2018 to 2020, the premium income accumulated by Dinghe Insurance through related party transactions accounted for 48% of the premium income for the whole year.
At the same time, Dinghe Insurance said that while deeply cultivating the shareholder business, the company actively developed the market business, and achieved a premium income of 5.26 billion yuan in 2021, of which the proportion of related party transactions was about 47%, the proportion of market business was 53%, and the year-on-year growth rate of market business reached 13%.
Dinghe Insurance also said that in the related party transactions, the company strictly follows the regulatory regulations, conducts pricing and transactions in accordance with fair and market-oriented standards, and timely fulfills the obligations of related party transaction filing and information disclosure, providing shareholders with high-quality and professional insurance services.
The number and scale of related party transactions in the insurance industry should be noted
In order to further strengthen the supervision of related party transactions, the China Banking and Insurance Regulatory Commission recently issued the Administrative Measures for Related Party Transactions of Banking and Insurance Institutions (hereinafter referred to as the Measures). At the same time, the Measures also make it clear that banking and insurance institutions should maintain the company's operational independence, improve market competitiveness, control the number and scale of related party transactions, focus on preventing the risk of profit transmission to shareholders and their related parties, and avoid complex arrangements such as multi-level nesting.
Hao Chen, associate professor of the China Institute of Corporate Governance and Business School of Nankai University, said in an analysis of the financial reporter of China Net that related party transactions are a matter of great concern in the field of corporate governance. On the whole, the direct problem caused by the excessively high level of related party transactions is the reduction of the independence of the company and the risk of profit transmission implied by it. For insurance companies, excessive related party transactions may not only infringe on the interests of minority shareholders, but also affect the interests or interests of insurance consumers, which are important interests of insurance companies.
Hao Chen said that according to the general related party transactions and separately disclosed related party transaction data of various insurance companies on their official websites compiled in the "China Insurance Company Governance Development Report 2019" (Nankai University Press), it was found that the total amount of related party transactions of mainland insurance companies in 2016, 2017 and 2018 was 659.735 billion yuan, respectively. 764.282 billion yuan and 606.320 billion yuan, the proportion of related party transactions in each year to the original insurance premium income of insurance companies was 21.31%, 20.89% and 15.95% respectively. Overall, the level of related party transactions of mainland insurance companies has shown an overall downward trend since 2016.
He said that the mainland regulatory authorities have always attached great importance to the supervision of related party transactions and have issued a series of documents. In order to regulate the related party transactions of insurance companies, the China Banking and Insurance Regulatory Commission (CBIRC) issued the Administrative Measures for Related Party Transactions of Banking and Insurance Institutions in January 2022. With the implementation of the above measures, it is believed that the overall level of related party transactions of mainland insurance companies will further decline significantly.
At the same time, he suggested that in order to control the scale of related party transactions of insurance companies, the role of independent directors and relevant special committees can be fully played at the level of insurance companies, and independent directors should actively express their opinions on important provisions related to related party transactions to prevent the occurrence of unreasonable or excessive related party transactions, and at the same time, the company should disclose the relevant information of related party transactions in detail and accept broader supervision.
(Editor-in-Charge: Meng Qianyun)
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