Interim Measures for Off-site Supervision of Insurance Companies Released: Emphasizing institutional supervision as the lead, it will be implemented from March 1

Per reporter: Yuan Yuan Per editor: Liao Dan

In order to establish and improve the off-site supervision system of insurance companies, clarify the division of responsibilities for off-site supervision, standardize the workflow of off-site supervision, and improve the work efficiency of off-site supervision, on January 20, the China Banking and Insurance Regulatory Commission issued the Interim Measures for Off-site Supervision of Insurance Companies (hereinafter referred to as the Interim Measures).

It is reported that at the same time as the issuance of the Interim Measures, the CBRC is also stepping up its efforts to study and formulate risk monitoring and off-site regulatory assessment guidelines for property insurance companies, life insurance companies and reinsurance companies.

Emphasis is placed on institutional supervision as the lead

As a regulatory provision for off-site supervision of insurance companies, the Interim Measures consist of 7 chapters and 39 articles, which are divided into general provisions, division of duties and work requirements, information collection and collation, daily monitoring and regulatory assessment, application of assessment results, information archiving and by-laws.

Specifically, the Interim Measures summarize the work experience of off-site supervision of insurance companies, clarify the division of responsibilities for off-site supervision of insurance companies, and standardize the work process of off-site supervision of insurance companies.

First, clarify the meaning of off-site supervision of insurance companies and the principles to be followed in carrying out off-site supervision;

Second, clarify the division of responsibilities between institutional supervision departments, other relevant regulatory departments and dispatched agencies in the off-site supervision of insurance companies, emphasize that off-site supervision should strengthen coordination among relevant departments, and achieve strong synergy between off-site supervision and other regulatory means and regulatory fields;

Third, clarify the work processes and requirements for off-site supervision, including the sources, methods and requirements for the collection of information required for off-site supervision, the frequency and work requirements for the legal entities and branches of insurance companies to carry out off-site supervision assessments, the regulatory measures that can be taken according to the results of off-site supervision assessments, and the coordination with on-site inspections, administrative approvals, regulatory regulations and policies.

The relevant person in charge of the Banking and Insurance Regulatory Commission said that summarizing the previous experience of off-site supervision of insurance companies, combined with the current division of regulatory responsibilities, the following ideas were followed when formulating the Interim Measures: emphasizing institutional supervision as the leading role and highlighting the standardization of work processes and mechanisms.

According to its introduction, the off-site supervision system can be divided into two aspects: the first is the work process and mechanism, and the second is the indicators and methods of regulatory assessment. Considering that there are large differences in the business scope and business model of property insurance companies, reinsurers and life insurance companies, as well as risks, it is necessary to formulate targeted monitoring indicators and evaluation guidelines separately, and there are many relevant contents. Therefore, the Interim Measures mainly regulate and clarify the work process and mechanism of off-site supervision, and the guidelines for guiding off-site supervision monitoring and evaluation work are formulated and issued separately.

It will be officially implemented on March 1

The relevant person in charge of the CBIRC also gave an explanation on how the off-site supervision led by the institutional regulatory department can form a regulatory synergy with other regulatory means such as on-site inspection. "Article 8 of the Interim Measures stipulates that the linkage between various regulatory departments should be strengthened and the sharing of regulatory information should be promoted."

The relevant person in charge of the above-mentioned CBIRC said that Article 9 of the Interim Measures emphasizes that off-site supervision should be effectively linked with regulatory measures such as administrative approval and on-site inspection, and cooperate and complement key regulatory areas such as corporate governance, solvency, use of funds and consumer rights and interests protection. Article 28 of the Interim Measures clearly proposes project establishment based on the results of off-site supervision and assessment, and provides relevant data on off-site supervision to the on-site inspection department after the project is established, so as to track the progress and results of the inspection in a timely manner. Article 30 of the Interim Measures stipulates that in the process of carrying out off-site supervision, if it is analyzed that there are matters that need attention in regulatory regulations, regulatory policies, etc., it shall be promptly notified within the regulatory authority.

In addition, what is the relationship between off-site supervision and the combined solvency risk rating? According to the relevant person in charge of the Banking and Insurance Regulatory Commission, off-site supervision serves institutional supervision, emphasizing the combination of quantitative and qualitative analysis, which is a comprehensive supervision covering the whole process and the whole process of insurance company operation. The comprehensive rating of solvency risk is an integral part of the second generation of solvency, which serves the supervision of solvency and basically adopts quantitative evaluation. Solvency regulation is essentially capital regulation, and the regulatory focus is on capital adequacy. In general, the two have their own emphases and complement each other.

The Interim Measures will come into force on 1 March 2022. The CBRC said that the next step will be to strengthen supervision and guidance, do a good job in the implementation of the Interim Measures, effectively improve the efficiency of off-site supervision of insurance companies, and comprehensively identify, monitor and evaluate the risk status of insurance companies.

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