The several measures comprise eight provisions focusing on guiding institutional layout, improving unified registration, accelerating platform development, enhancing capacity supply, deepening reform and opening-up, expanding cross-border cooperation, strengthening regulatory effectiveness, and optimizing the development environment.
On July 7, China’s National Financial Regulatory Administration (NFRA) and the Shanghai Municipal People’s Government jointly issued the several measures to accelerate the construction of Shanghai as an international reinsurance center.
These measures aim to expedite the development of Shanghai as an international reinsurance center and promote the high-quality growth of China’s reinsurance market.
The several measures comprise eight provisions focusing on guiding institutional layout, improving unified registration, accelerating platform development, enhancing capacity supply, deepening reform and opening-up, expanding cross-border cooperation, strengthening regulatory effectiveness, and optimizing the development environment.
Regarding institutional layout, the several measures propose optimizing the allocation of institutions to facilitate the smooth flow and efficient distribution of various factors within the Lingang New Area of the China (Shanghai) Pilot Free Trade Zone.
Large enterprises are encouraged to centralize their risk management and protection needs in the Lingang New Area, promoting precise matching between risks and underwriting capacity. Leveraging the policy advantages of the Lingang New Area, insurance institutions will be supported in strengthening communication and cooperation to accelerate the construction of a reinsurance market ecosystem.
On improving the registration and trading mechanism, the several measures call for domestic insurance institutions to conduct unified registration of reinsurance contracts, claims, and other information at the Reinsurance Registration and Trading Center.
The Center will be supported in refining data registration standards, implementing tiered and classified data management, and strengthening data governance and security confidentiality in compliance with the law.
Furthermore, data applications will be deepened to enhance research on insurance and credit risks across various scenarios, thereby empowering the professional risk management capabilities of China’s insurance industry.
Additionally, the several measures require accelerating the optimization of on-exchange trading functions, improving standardized reinsurance contracts and billing, and promoting the construction of an efficient and transparent digital trading platform.
This includes gradually enhancing the efficiency of platform registration, contract signing, accounting clearance, fund settlement, bill circulation, and tax administration.
In terms of enhancing reinsurance capacity supply, the several measures specify support for reinsurance institutions to increase capital through share expansion and the issuance of capital replenishment instruments.
This aims to boost both endogenous capital accumulation and exogenous capital supplementation, thereby strengthening the industry. Insurance institutions will be guided to aggregate underwriting capacity around national major projects, strategic emerging industries, and livelihood protection to elevate risk coverage.
On deepening reform and opening-up, the several measures support exploring broader channels for dispersing special risks, such as catastrophic risks.
Insurance institutions will be supported in opening dedicated custody and fund settlement accounts in the Lingang New Area, utilizing facilitation policies for overseas investment of cross-border reinsurance ceded income.
Data security management policies will be implemented, guidelines for cross-border transfer of reinsurance data will be updated, and cross-border data services will be optimized.
Regarding cross-border cooperation, the sSeveral Measures propose leveraging the Lingang New Area’s cross-border advantages to attract insurance institutions to expand into new incremental markets and enhance cross-border ceded business management capabilities. Institutions will be supported in introducing cutting-edge risk modeling and underwriting expertise to cultivate core technologies.
On regulation, the several measures require insurance institutions to fulfill their primary responsibilities, establish robust internal control and compliance management systems, and strengthen the management of operational risks and cross-border capital flows.
Prudent regulatory rules for the reinsurance sector will be improved, with enhanced oversight on solvency, related-party transactions, and business finance. Risk monitoring for cross-border cessions and on-exchange transactions will be made more penetrating and effective to ensure the safe and stable operation of the Shanghai International Reinsurance Center.
Furthermore, the several measures specify support for the Lingang New Area in optimizing institutional incentive policies and refining dedicated talent policies for reinsurance. Shanghai will provide localized management services and facilitation arrangements for the entry and exit of personnel from insurance institutions conducting reinsurance business in the Lingang New Area.
Exploring the establishment of a reinsurance arbitration mechanism in the Lingang New Area and improving alignment with international commercial rules are also included.
Relevant officials from the NFRA and the Shanghai Municipal Government stated that, overall, the construction of the Shanghai International Reinsurance Center has achieved phased progress, serving as a crucial lever for building a modern reinsurance market system and a vital component of Shanghai’s development as an international financial center.
The several measures focus on accelerating the reinsurance market ecosystem, stimulating business vitality, enhancing protection for major projects, and building a solid risk prevention barrier, thereby addressing market concerns and sending positive signals.
The issuance of these measures will help deepen central-local coordination, build synergy, and form a continuous, progressive development momentum, further refining the top-level design for the reinsurance center.