On 4 May 2016, the China Insurance Regulatory Commission (“CIRC”) issued the Information Disclosure Standards for Insurance Companies on the Use of Funds No.4: Large Investments in Unlisted Shares and Large Real Estate Investments (the “Standards”), with immediate effect. The Standards apply to large investments in unlisted shares and large real estate investments within and outside China by insurance companies.
The Standards aim to monitor and supervise the market and to further regulate the information disclosure obligations of insurance groups, insurance companies and insurance asset management companies on their investments in unlisted shares and in real estate within and outside China. Large investments in unlisted shares refers to a single unlisted company with the cumulative amount of investment of more than 3 billion RMB (or the equivalent thereof in a foreign currency), large real estate investments refer to direct investment in domestic real estate of the cumulative amount of more than 5 billion RMB (or the equivalent thereof in a foreign currency).
The Standards stipulate that insurance companies need to disclose information such as the expected amount of investment, name and location of the estate, funding resources (equity funds, insurance policy reserves and other funds), when requirements for disclosure are met. The information disclosed by insurance companies needs to be true, accurate, complete and standardized, with no misrepresentations, misleading statements or material omissions. In case the information that is required to be disclosed cannot be disclosed in accordance with applicable laws relating to state secrets, insurance companies need to give a written explanation to the CIRC at least 5 working days prior to the signing date of the investment agreement, and should notify the CIRC that certain information will not be disclosed.
For more details, see