RULES FOR THE COMPILATION OF INFORMATION DISCLOSURES BY THE COMPANIES OFFERING SECURITIES TO THE PUBLIC (NO. 3) — SPECIAL PROVISIONS ON THE CONTENTS AND FORMATS OF PROSPECTUSES OF INSURANCE COMPANIES (AMENDED IN 2006)
Circular of the China Securities Regulatory Commission concerning the Promulgation of the Rules for the Compilation of Information Disclosures by the Companies Offering Securities to the Public (No. 3) — Special Provisions on the Contents and Formats of Prospectuses of Insurance Companies Zheng Jian Fa Xing Zi [2006] No. 151 Each insurance company and recommendation institution: The Rules for the Compilation of Information Disclosures by the Companies Offering Securities to the Public (No. 3) — Special Provisions The China Securities Regulatory Commission December 8, 2006 Rules for the Compilation of Information Disclosures by the Companies Offering Securities to the Public (No. 3) — Special Provisions Article 1 In accordance with the Company Law of the People’s Republic of China, the Securities Law of the People’s Republic of China, the Insurance Article 2 When an insurance company formulates the prospectus for the initial public offering it shall follow the requirements as prescribed Article 3 An insurance company shall at least disclose the risk factors as follows: (1) risks in the change of interest rates; (2) risks in the insufficiencies of price fixing and reserves that may be caused by the such premises as preconcerted interest rates, (3) operational risks, that is, the risks caused by imperfect or ineffective internal control or uncontrollable external conditions, for (4) risks in insurance frauds, that is, the risks resulted from that the policy holders, the insured, insurance agents, brokers or assessors (5) risks of investment, that is, the risks resulted because the asset value of the investment portfolio of the insurance company reduces (6) risks in the non-matching of assets and debts, that are, the risks resulted from unfavorable influences to its solvency caused by (7) risks in the information system, that is , the losses to the insurance company or the unfavorable influences to its operational performances (8) policy risks, that is, the risks from the alteration of national policies, laws or regulations, for instance, the risks resulted from (9) other risks, namely, the risks faced by the insurance company besides those mentioned above. Article 4 As for the disclosure of the basic conditions about the insurance industry of China, an insurance company shall, at least disclose (1) the overview about China’s insurance industry; (2) the characteristics and trends of developments of the insurance industry; and (3) the regulatory system and main laws and regulations of insurance industry. Article 5 An insurance company shall at least disclose the following contents in accordance with its own conditions: (1) the market share of each primary insurance business conducted by the issuer; (2) primary advantages and disadvantages of the issuer in the market competition; (3) the development system, marketing personnel and network, and insurance agency conditions of the issuer and so on; and (4) the conditions on study and development of insurance products, and the main new products lately promoted, etc. Article 6 An insurance company shall set up and disclose its internal control systems, which includes the control of businesses in sales, underwriting, Article 7 An insurance company shall disclose its main insurance business categories and its development plans, and the principles and methods An insurance company shall disclose the composition of its premium incomes for the recent three years and the latest period in light An insurance company shall disclose the composition of compensations and commissions in light of main insurance business categories Article 8 By considering the characteristics of its own business, an insurance company shall disclose the types of reserves, principles and Article 9 In accordance with the relevant provisions of the CIRC, an insurance company shall, disclose the conditions about the solvency at In case the solvency amount and the monitoring indices of an insurance company for the recent three years and the latest period exceed Article 10 An insurance company shall disclose related policies and its main business partners about the reinsurance business. An insurance company shall disclose the amount of outward and inward payment of premiums, reinsurance reserves, and the reasons for A reinsurance company shall disclose the reinsurance premium incomes and the ceded insurance premiums in light of main insurance business A property insurance company shall disclose the policies for which it undertakes the major insurance liability at the end of the latest Article 11 An insurance company shall make disclosure of the main contents and accounting methods of financial reinsurance contracts for the Article 12 By considering the provisions of the insurance regulatory organ, an insurance company shall disclose its investment policies, strategies, In light of investment targets and investment purposes, an insurance company shall separately disclose its investment portfolio composition Article 13 For the initial public offering of securities, a life insurance company, health insurance company or pension insurance company shall An insurance company shall employ an external actuarial agency or actuaries to compile a report on embedded value in accordance with “This agency and our actuaries for signature have read the prospectus and its summery, and make sure that there is no conflict between When disclosing the relevant information about the embedded value in the prospectus, an insurance company shall state that: “the embedded (1) the embedded value at the end of the latest year and the results of the new businesses’ value of one year; (2) return ratio and risk discount ratio for calculation of embedded value and other main assumptions at the end of the latest year; (3) sensitive analysis results on the embedded value at the end of the latest year and the new businesses’ value of one year; and (4) the analysis of the change of embedded value at the end of the latest year. Article 14 An insurance company shall disclose main accounting policies and accounting estimates as adopted within the reporting period by considering (1) detailed methods for confirming and calculating the premium incomes (reinsurance premium incomes are included) for main insurance (2) accounting methods for outstanding loss reserves; (3) accounting methods for the undue insurance liabilities reserves; (4) accounting methods for the life insurance liabilities reserves; (5) accounting methods for the reserves for long-term health insurance liabilities; and (6) accounting methods for the whole reserves. A reinsurance company shall pay more attention to the disclosure of the accounting methods for various reinsurance reserves. Article 15 An insurance company shall disclose the information about its branches in accordance with the provisions. If any branch is established abroad, an insurance company shall separately disclose the business operation situation of the overseas Article 16 An insurance company shall disclose the composition of premiums receivable at the end of the latest year and the latest period in Article 17 An insurance company shall disclose the amount of reinsurance debts receivable and payable at the end of the latest year and the Article 18 An insurance company shall separately disclose the long-term equity investment at the end of the latest year and the latest period Article 19 An insurance company shall analyze and explain the alterations of commissions payable within the reporting period. Article 20 An insurance company shall disclose the amount and interest rate of policy-pledged loans at the end of the latest year and the latest Article 21 An insurance company shall disclose the book balance of and the depreciation reserves for pending materials insolvent at the end Article 22 An insurance company shall disclose the calculating basis and amount of the reserves for capital bonds and insurance protection funds. Article 23 An insurance company shall disclose such financial indices of the recent three years and the latest period as liquidity ratio, debt-to-asset An insurance company shall make explanations for the changes of the indices mentioned above for the recent three years and the latest Article 24 An insurance company shall, if it plans to use the raised capital for the establishment of a branch, disclose the amount of capital Article 25 An accounting firm that has professional actuaries, the experiences for audit of insurance companies, and the qualification to engage The main contents that need attention to be paid for supplementary audit include: the reserves for losses, and disposition of non-performing The financial materials in the formal text of the prospectus shall be digested from statutory financial statements. Supplementary Article 26 The present Provisions shall come into effect as of the promulgation date. The Rules for the Compilation of Information Disclosures |
The China Securities Regulatory Commission
2006-12-08