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China relaxes restrictions on foreign access to insurance industry

China has relaxed investment restrictions to allow foreign-invested firms in the insurance industry, as part of its efforts to strengthen economic ties with the US as agreed earlier in 2012.

The Chinese government has recently proposed to increase the limit of ownership stake of foreign securities firms in joint ventures, from 33% to 49%.

China’s American Chamber of Commerce president Christian Murck was quoted by The Associated Press as saying, "I view it as partially a response to a trend of declining foreign investment."

"I know the Chinese have been concerned about what’s driving that and what they can do to make sure foreign investment is encouraged," Murck added.

The Chinese Government had also decided in May 2012 to open its compulsory third-party motor liability market to foreign insurance firms, to benefit both domestic and foreign insurance sellers.

Motor forms the biggest part of Chinese non-life insurance market producing total premiums of Rmb300bn in 2010, which is almost 75% of all non-life premiums, according to the China Insurance Regulatory Commission.