China Daily reports that soon Shanghai will start an international reinsurance trading market, also known as a reinsurance international board, bolstering the city’s plans to become a worldwide reinsurance centre.
Zhang Zhongning, deputy director of the general office of the National Administration of Financial Regulation, broke the news at a conference earlier this week.
“The trading system and related rules, such as registration management regulations for international reinsurance inflow business, clearing and settlement methods for on-site cross-border transaction facilitation, and operational guidelines for solvency reinsurance credit risk, will all be finalised,” Zhang said.
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In addition, in August of 2019, the Lingang Special Area (which is a member of the China (Shanghai) Pilot Free Trade Zone) will become an international reinsurance function zone.
Zhang proposed that domestic and international insurers could benefit from preferential tax and cross-border capital policies, as well as differentiated supervision measures, by establishing reinsurance operation facilities in Lingang or opening accounts via the international reinsurance business platform in the area.
Shanghai Global Reinsurance Centre Goals Bolstered By Supportive Regulations
According to a report in the China Daily, the central government has given its approval for the development of Shanghai’s Pudong New Area into a leader in socialist modernization.
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This approval includes the construction of an international reinsurance centre.
Thus, a guideline with 13 detailed measures was released in late October 2021 to help achieve this. The construction plan for the reinsurance international board was released during the 4th Lujiazui International Reinsurance Conference held in late November, with preparatory work already underway.
“By the time the conference was held, over 500 overseas reinsurance policyholders had participated in China’s reinsurance market, reflecting the appeal of the Chinese insurance market,” said Liang Tao, vice-chairman of the then China Banking and Insurance Regulatory Commission.
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Liang added, “Reinsurance plays an important role in promoting the industry’s risk protection capabilities and enhancing risk management levels.”
Meanwhile, experts from the China Re Group said that the international board will facilitate China’s high-level two-way opening up.
Shanghai Global Reinsurance Centre Goals Bolstered By Supportive Regulations
“China’s reinsurance industry will thus be able to deeply participate in global risk management and create room for deeper cooperation,” they said.
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State-owned China Re Group is a large reinsurance player in China and Asia, with its 2022 consolidated gross written premiums up 4.3% year-on-year to over 169.7 billion yuan ($23.9 billion).
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