CHINA: An Introduction to Insurance (PRC Firms)

Introduction

前言

In 2024, China's insurance market continued to witness significant developments, including the impact of amendments to the company law, the impact of civil litigation procedures, the impact of data laws, and discussions surrounding the fifth amendment to the Insurance Law. The newly revised "Company Law of the People's Republic of China" has established a liability insurance system for directors and senior management personnel in the form of legislation for the first time. This new type of insurance may lead to a new type of insurance litigation, which may become common in the future. The simplification of judicial procedures will have a positive impact on insurance litigation. The green insurance in the primary stage has found a unique growth opportunity in China's commitment to the principles of green development. Data protection laws present both challenges and opportunities. The fifth revision of the proposed Insurance Law aims to address practical issues that have arisen during its implementation, which reflects the main purpose of improving the operational efficiency of the insurance industry and focusing on consumers. In general, these developments reflect the resilience and adaptability of China's insurance market in a complex and ever-changing environment.

2024年，中国的保险市场继续见证了重大的发展，与这些发展相关的背景包括公司法修订的影响、民事诉讼程序的影响、数据法的影响以及围绕保险法第五次修订的讨论，等等。新修订的《中华人民共和国公司法》首次以立法形式建立了董事及高级管理人员董监高责任保险制度。这种新型保险可能会引发一种新型保险诉讼，这种诉讼在未来可能会普遍存在。司法程序的简化会对保险诉讼带来积极影响。初级阶段的绿色保险在中国对绿色发展原则的承诺中找到了独特的增长机会。数据保护法既带来了挑战，也带来了机会。拟议中的保险法第五次修订旨在解决其实施过程中出现的实际问题，这体现了提高保险行业运营效率和以消费者为中心的主旨。总的来说，这些发展反映了中国保险市场在复杂和不断变化的环境中前行所表现出来的的韧性和适应性。

D&O liability insurance and its response to the newly revised Company Law

责任保险及其对新修订公司法的反应

In recent years, D&O liability insurance has gradually come into the public’s view, and the rate of insurance coverage has risen significantly as a result of the fraudulent incidents of listed companies. D&O insurance provides legal litigation costs and liability compensation insurance for corporate directors and executives. The demand for it in the market is increasing due to factors such as the implementation of the new Securities Law, strengthened market regulation, and investors’ focus on corporate governance. This new kind of insurance may lead to a new kind of insurance litigation, which may be widespread in the future. The newly revised Company Law of the People’s Republic of China came into effect on 1 July 2024 and establishes a directors and officers (D&O) liability insurance system by way of legislation for the first time. As for insurance coverage, the amendment may place an emphasis on transparency and accountability, especially with the focus on board composition and the role of independent directors in insurance companies, which is anticipated to lead to stricter underwriting criteria, potentially reshaping the terms and design of insurance products.

近年来，董监高责任险逐渐走进公众视野，受上市公司造假事件影响，投保率大幅上升。董监高责任险为企业董事和高管提供法律诉讼费用和责任赔偿保险。随着新证券法的实施、公司法的修订、市场监管的加强以及投资者对公司治理的关注等因素，市场对其的需求不断增加。这种新型保险可能会引发一种新型保险诉讼，这种诉讼在未来可能会普遍存在。新修订的《中华人民共和国公司法》于2024年7月1日起施行，首次以立法形式建立了董事及高级管理人员（D&O）责任保险制度。至于保险范围，修正案可能会强调透明度和问责制，特别是关注董事会的组成和独立董事的作用。预计这将导致更严格的承保标准，可能会重塑保险产品的条款和设计。

The impact on insurance litigation by the simplification of judicial procedures

司法程序简化给保险诉讼带来影响

The simplification of judicial procedures following the implementation of the Convention Abolishing the Requirement of Legalisation for Foreign Public Documents is reflected in the following:

• Simplification of the authentication process: the transnational circulation of public documents is simplified by the adoption of an additional certificate (Apostille) instead of the

traditional consular authentication. The Apostille can be used directly in the Contracting States without the need for multiple authentications by embassies and consulates abroad, thus reducing time and formalities.

• Subject qualification materials: when foreign enterprises or organisations conduct litigation

in China, they only need to handle the subject qualification documents certified by The Hague, which makes the procedure more convenient.

• Power of attorney materials: the authentication of the power of attorney has been changed from “notarisation + authentication” to “notarisation + additional certificate”, which simplifies the process.

• Evidence review: evidence involving identity relations is prioritised for the application of the Hague certification, and only additional certificates are required, without consular certification.

《废除外国公文认证要求公约》实施后司法程序的简化体现在以下方面:

• 简化认证过程：通过采用附加证书（海牙认证）代替普通文件，简化了公共文件的跨国流通。海牙认证可直接在缔约国境内使用，无需经过驻外使领馆多次认证，减少了时间和手续。

• 主体资格材料：外国企业或组织提起诉讼时在国内只需办理海牙认证的主体资格文件，手续更加便捷。

• 授权书材料：授权书认证由“公证+认证”变更为“公证+附加证明”，简化了流程。

• 证据审查：涉及身份关系的证据优先适用海牙认证，只需要额外的证明，无需领事认证。

The development of green insurance

绿色保险的发展

The incorporation of ESG principles into the insurance sector is intrinsically linked to the fundamental risk management and decision-making processes of its core business. This has prompted insurance firms to undertake a range of modifications in areas such as underwriting decisions, product innovation, and risk evaluation, which will inevitably influence insurance coverage and litigation.

Given that ESG encompasses the interests of a wide range of stakeholders in the environment and society, it essentially establishes a regulatory mechanism that could, at least theoretically, more effectively govern corporate behavior than previous evaluation standards. Consequently, we foresee insurance companies increasingly integrating ESG into their internal governance and control mechanisms for future assessments.

ESG原则的纳入保险行业与其核心业务的基本风险管理和决策过程密切相关。这促使保险公司在承保决策、产品创新和风险评估等领域进行了一系列的修改，这必然会影响承保范围和保险理赔方面的实践。

鉴于ESG涵盖了环境和社会中各种利益相关者的利益，它本质上建立了一个监管机制，至少在理论上，这个机制可以比以前的评估标准更有效地规范企业行为。因此，我们预见保险公司将越来越多地将ESG整合到他们未来评估的内部治理和控制机制中。

Insurers’ efforts in balancing compliance under data protection laws and insurance risk assessment

保险人力求在数据保护法见合规与保险风险评估中取得平衡

Within the realm of underwriting, data protection laws present a complex interplay of challenges and opportunities for insurance companies. The rigorous regulations surrounding data collection could potentially restrict the nature and volume of data that insurers are permitted to accumulate, a factor that is crucial for the precise evaluation of risks. Techniques of precision underwriting, which are heavily dependent on extensive datasets and utilise AI and data analytics, might encounter limitations. This scenario could have implications for product innovation and risk profiling. Consequently, while there is an industry-wide drive for insurers to innovate and offer personalised policies using individual data, they must tread carefully within the regulatory landscape to ensure compliance and accurate risk assessment. This delicate balance between innovation and compliance underscores the intricate dynamics of the insurance industry in the digital age. In this context, it becomes evident that while data protection laws aim to safeguard personal information, they also inadvertently shape the strategies and operations of insurance companies. As such, navigating these regulatory waters requires not only legal acumen but also strategic foresight and adaptability.

在承保领域，数据保护法为保险公司带来了挑战和机会。严格的数据收集规定可能限制保险公司被允许积累的数据的性质和数量，这是准确评估风险的关键因素。依赖大量数据集并利用AI和数据分析的精确承保技术可能会遇到限制。这种情况可能会对产品创新和风险分析产生影响。因此，虽然整个行业都在推动保险公司使用个人数据创新和提供个性化的保单，但他们必须在监管环境中谨慎行事，以确保在合规和准确的风险评估取得平衡。这种创新与合规之间的微妙平衡突显了数字时代保险行业的复杂动态。在这种情况下，显而易见的是，虽然数据保护法旨在保护个人信息，但也不可避免直接影响到保险公司的策略和运营。因此，在这些监管水域中游弋，不仅需要法律敏锐度，还需要战略远见和适应性。

Fifth amendment to the Insurance Law under discussion

保险法第五次修订仍在讨论中

The Insurance Law is poised for its fifth revision, with the objective of addressing salient practical issues that have emerged during its implementation. At the State Council's regular policy briefing held on 27 September 2024, Wang Shengbang, director of the Regulations Department of the State Administration of Financial Supervision, revealed that he is currently actively co-operating with relevant departments to promote the revision of the Insurance Law. This means that the pace of revision of the Insurance Law is accelerating. The problem orientation of the revision is to solve some deficiencies existing in the current operation and supervision of the insurance industry and the risk management of insurance institutions and make up for the shortcomings; the goal orientation is to further lay the legal environment and legal foundation for the high-quality development of the insurance industry.

At the regulatory level, the future regulatory system will shift from "behavioural regulation" that mainly focuses on the micro-management of the insurance industry to a more "risk-based" regulatory system that emphasises the operational soundness of insurance companies. Emphasising "risk-based" supervision not only emphasises micro-specific operating behaviors, but also emphasises the soundness of insurance companies' operations.

Additionally, we expect that the revisions will emphasise the principles of transparency and accountability, particularly in relation to the composition of insurance company boards and the role of independent directors. This focus could lead to tighter underwriting standards, which could change the terms and structure of insurance products.

In addition, revisions may provide for clearer standard clauses, particularly initiatives to exclude liability clauses, which are expected to simplify insurance clauses and minimise ambiguity. Enabling new categories of insurance contracts will also expand and diversify the range of insurance products available to choose from, thereby providing consumers with a wider range of professional protection options.

In essence, the upcoming amendments to the insurance law mark an important step towards making the insurance industry’s operations more efficient and consumer-centric, while also promoting a more transparent and accountable industry environment.

保险法即将进行第五次修订，目标是解决在其实施过程中出现的突出的实际问题。在2024年9月27日召开的国务院政策例行吹风会上，金融监管总局法规司司长王胜邦透露，目前正积极配合相关部门推动《保险法》的修订。这意味着《保险法》修订步伐正在加快。修订的问题导向是解决目前保险业运行中、保险业监管中，保险机构风险处置中存在的一些缺陷，补齐短板；目标导向则是进一步为保险业高质量发展奠定法制环境和法律基础。

在监管层面，未来的监管制度，将从主要关注保险业微观经营的“行为监管”，转变为更为强调“风险为本”的监管体系，强调保险公司的经营稳健性。强调“风险为本”的监管，就不仅仅强调微观的具体经营行为，还要强调保险公司经营的稳健性。

另外，我们预计，此次修订将强调透明度和问责性的原则，特别是与保险公司董事会的组成和独立董事的角色有关。这个焦点可能会导致更严格的承保标准，这可能会改变保险产品的条款和结构。

此外，修订可能提供更清晰的标准条款，特别是责任免除条款的倡议，预计将简化保险条款并最小化模糊性。启用新类别的保险合同也将扩大和多样化可供选择的保险产品的范围，从而为消费者提供更广泛的专业保障选项。

本质上，即将对保险法进行的修订标志着提高保险行业运营效率和以消费者为中心的重要一步，同时也促进了更透明、更有责任感的行业环境的形成。

Conclusion

结语

In 2025, China's insurance market is expected to further develop and transform. Regulatory reforms are expected to continue, and the fifth revision of the Insurance Law may be finalised within the year and will bring significant changes to the industry's operating landscape. The impact of revisions to the Company Law and the Civil Procedure Law on the insurance industry will also become increasingly significant. Driven by China's commitment to sustainable development and carbon neutrality, the green insurance industry is expected to mature. Data protection laws will continue to impact the industry, particularly in terms of underwriting and risk assessment. In summary, insurers need to find a balance between the drive for innovation and regulatory compliance.

在2025年，中国的保险市场有望进一步发展和转型。预计监管改革将继续进行，保险法第五次修订可能在年内落定并会对行业的运营格局带来重大变化。公司法和民事诉讼法修订在保险行业带来的影响也会日益显著。在中国致力于可持续发展和碳中和的推动下，绿色保险行业预计将逐渐成熟。数据保护法将继续影响行业，特别是在承保和风险评估方面。总之，保险公司需要在创新的驱动力和遵守法规之间找到平衡。