Article 75 The financial supervision and control department shall， within six months counted as commencing on the date of receiving the formal application documents for the establishment of an insurance company， make a decision to approve or disapprove it.

Article 76 An insurance company approved to be established shall be issued a permit to engage in the insurance business by the department of approval， and shall， on the strength of the aforesaid permit， go through registration with the administrative department for industry and commerce， and receive a business licence.

Article 77 If an insurance company， within six months counted as commencing on the date of receiving a permit to engage in the insurance business， fails to go through registration of the establishment of a company without justified reasons， its permit to engage in the insurance business shall be valid automatically.

Article 78 An insurance company shall， after its establishment， draw 20 percent of its total registered capital for guarantee fund， and deposit in the bank designated by the financial supervision and control department； the guarantee fund may not be used except to be used to liquidate debts when the insurance company is wound up.

Article 79 An insurance company shall be subject to the approval of the financial supervision and control department in establishing branches within or outside the territory of the People's Republic of China， and shall receive permits to engage in insurance business for these branches.

The branches of an insurance company do not have the status of legal person， and their civil liability shall be borne by the insurance company.

Article 80 The establishment of representative offices of an insurance company within or outside the territory of the People's Republic of China shall be subject to the approval of the financial supervision and control department.

Article 81 Any of the following modifications of an insurance company shall be subject to the approval of the financial supervision and control department：

（1） change of its designation；

（2） change of its registered capital；

（3） change of business place of the company or its branch；

（4） adjustment of its business scope；

（5） split or merger of the company；

（6） revision of its articles of association；

（7） change of the contributors or shareholders who own 10 percent or more of the total shares； and

（8） other modifications stipulated by the financial supervision and control department.

An insurance company which intends to change the chairman of board or the general manager shall report the financial supervision and control department for examining his qualifications for the position.

Article 82 The provisions of the Company Law shall apply to the organization of an insurance company.

Article 83 A solely state-owned insurance company shall set up a board of supervisors， which shall be composed of representatives from the financial supervision and control department， relevant experts and the staff of the company and carry out supervision over various reserve fund drawn by the solely state-owned insurance company， its minimum payment capacity and increase and maintenance of value of the state-owned property and assets as well as acts of senior managerial personnel committed in violation of laws， administrative regulations or the articles of association and acts impairing the company's interests.

Article 84 Due to its split， merger or the appearance of the cause of dissolution stipulated in the articles of association and upon the approval of the financial supervision and control department， an insurance company may be dissolved. The insurance company shall， according to law， form a liquidation group to carry out liquidation.

Any insurance company which engages in the life insurance business may not be dissolved except its split or merger.

Article 85 Any insurance company which violates the law and administrative regulations and the permit of which to engage in the insurance business is revoked by the financial supervision and control department shall， according to the law， be liquidated. The financial supervision and control department shall， according to the law， form a liquidation group to carry out liquidation.

Article 86 Any insurance company which is unable to pay the debts due shall， with the consent of the financial supervision and control department， be declared bankrupt by a people's court according to law. If an insurance company is declared bankrupt， the people's court shall form a liquidation group composing of the financial supervision and control department， other relevant departments and relevant personnel to carry out liquidation.

Article 87 If an insurance company engaged in life insurance business is dissolved or is declared bankrupt according to law， the life insurance contracts and reserve fund in its possession shall be transferred to other insurance companies engaged in life insurance business； if the insurance company cannot come to an agreement on transfer with other insurance companies， the financial supervision and control department shall appoint insurance companies engaged in life insurance business to accept them.

Article 88 If an insurance company goes bankrupt according to law， the bankruptcy property shall， after being used to pay the bankruptcy expenses in priority， be distributed according to the following order：

（1） wages and salaries to its employees in arrears and labour insurance costs；

（2） indemnity or payment of the insurance；

（3） tax in arrears； and

（4） liquidation of the company's debts.

If the bankruptcy property is not sufficient to liquidate the liquidated demands in the same order， it shall be distributed according to a percentage.

Article 89 Where an insurance company terminates its business activities according to law， its permit to engage in the insurance business shall be cancelled.

Article 90 The provisions of the Company Law and other relevant laws and administrative regulations， in the absence of the provisions in this Law， shall apply to the matters such as establishment， modification， dissolution and liquidation of insurance companies.

Chapter IV Rules of Insurance Business Operation

Article 91 The business scope of an insurance company is：

（1） property insurance business， including such insurance business as property loss insurance， liability insurance and credit insurance； and

（2） life insurance business， including such insurance business as life insurance， health insurance and accidental injury insurance.

The same insurer may not engage in property insurance business and life insurance business concurrently.

The business scope of an insurance company shall be checked and ratified by the financial supervision and control department. The insurance company can only engage in the insurance business activities checked and ratified.

The State Council shall formulate the measures of separation of business operation as provided in the second paragraph for those insurance companies which have been set up prior to the enforcement of this Law.

Article 92 Upon the check and ratification of the financial supervision and control department， an insurance company may engage in the following reinsurance business of the insurance business provided in the preceding Article：

（1） outward insurance；

（2） inward insurance.

Article 93 Any insurance company engaged in other insurance business than life insurance business shall draw undue liability reserve fund from the retention insurance premiums of the current year； the amount drawn and carried forward shall be equivalent to 50 percent of the retention insurance premiums of the current year. Any insurance company engaged in life insurance business shall draw undue liability reserve fund according to the total net value of valid life insurance policies.

Article 94 Any insurance company shall draw the outstanding indemnity reserve fund in accordance with the amount of insurance indemnity or payment already claimed， as well as the amount of insurance indemnity or payment not yet claimed but an insurance accident already happened.

Article 95 Apart from drawing reserve fund as provided in the preceding two Articles， any insurance company shall， in accordance with the provisions of relevant laws， administrative regulations and the state's financial accounting system， draw the accumulation fund.

Article 96 In order to guarantee an insured's interests and support the steady and health management of an insurance company， any insurance company shall， according to the regulations of the financial supervision and control department， deposit the insurance guarantee fund.

The insurance guarantee fund shall be centrally controlled and used with all-round consideration.

Article 97 Any insurance company shall have minimum solvency which matches with its business scale. The difference between the actual assets and actual debts of the insurance company may not be lower than the amount stipulated by the financial supervision and control department； if the amount is lower than the amount stipulated， the insurance company shall increase its capital to make up the difference.

Article 98 The retention insurance premiums of the current year of an insurance company engaged in property insurance business may not exceed four times of the combined total of its actual capital and accumulation fund.

Article 99 Each risk unit of an insurance company， that is， the liability for the maximum loss scope possibly to becaused by an insurance accident， may not exceed 10 percent of the combined total of its actual capital and accumulation fund； the excess shall effect reinsurance.

Article 100 Any insurance company shall report the method of calculating risk units and the plan to arrange catastrophe risk to the financial supervision and control department and apply to it for check and ratification.

Article 101 Except life insurance business， an insurance company shall， in accordance with the state's regulations， handle reinsurance for 20 percent of each insurance business it accepts.

Article 102 Where an insurance company needs to offer outward reinsurance， it shall give priority to insurance companies within the territory of China.

Article 103 The financial supervision and control department has the authority to restrict or forbid insurance companies to offer outward reinsurance business to insurance companies outside the territory of China， or to accept inward reinsurance business from outside the territory of China.

Article 104 The application of funds of an insurance company shall be safe， follow the safety principle， and guarantee to increase and maintain the value of its assets.

The application of funds of an insurance company is restricted only to bank deposit， trading of government bonds and financial bonds and other forms of application of funds stipulated by the State Council.

The fund of an insurance company may not be applied to set up securities management organizations or to invest in enterprises.

The concrete proportion of fund applied by an insurance company and the fund for concrete projects to its total fund shall be stipulated by the financial supervision and control department.

Article 105 Any insurance company and its staff may not commit any of the following acts during insurance business activities：

（1） cheating an applicant for insurance， an insured or a beneficiary；

（2） concealing important information relating to insurance contract from an applicant for insurance；

（3） preventing an applicant for insurance from performing the obligation of really informing provided in this Law， or inducing him not to perform the obligation of really informing provided in this Law； or

（4） promising an applicant for insurance， an insured or a beneficiary a premium rebate， or other interests beyond the stipulations of the insurance contract.

Chapter V Supervision and Control of Insurance Business

Article 106 Basic insurance clauses and premium rates for main kinds of risks of commercial insurance shall be provided by the financial supervision and control department.

Insurance clauses and premium rates for other kinds of risks drafted by an insurance company shall be reported to the financial supervision and control department for record.

Article 107 The financial supervision and control department has the authority to inspect the business condition， the financial condition and the condition of application of fund of an insurance company， and has the authority to require an insurance company to submit relevant written reports and materials within a specified time limit.

Any insurance company shall accept supervision and inspection according to law.

Article 108 Where an insurance company fails to draw or carry forward various reserve funds according to the provisions of this Law， or fails to handle reinsurance according to the provisions of this Law， or seriously violates the provisions of this Law on the application of funds， the financial supervision and control department shall order the said insurance company to take the following measures to correct its mistakes within the specified time limit：

（1） drawing or carrying forward various reserve funds according to law；

（2） handling reinsurance according to law；

（3） correcting its act of the application of fund in violation of law； and

（4） changing the person（s） in charge and relevant managerial personnel.

Article 109 According to the provisions of the preceding Article， if the financial supervision and control department having made a decision of correction within a specified time limit， the insurance company fails to make correction within the specified time limit， this department shall decide to select professional persons in the insurance business and appoint relevant personnel from the said insurance company to form a reorganization group to reorganize the said insurance company.

The reorganization decision shall state the designation of the insurance company to be reorganized， the cause for reorganization， the reorganization group， and the period of reorganization， and shall be announced publicly.

Article 110 The reorganization group， in the process of reorganization， has the authority to supervise the said insurance company's daily affairs. The persons in charge and relevant managerial personnel of the said insurance company shall exercise their functions and powers under the supervision of the reorganization group.

Article 111 In the process of reorganization， the original business of the insurance company may continue， however， the financial supervision and control department has the authority to ban any new business or to suspend part of the original business and to adjust the application of fund.

Article 112 Where an insurance company， through rectification， has already corrected its acts violating this Law and resumed its original state of operation， the reorganization shall， after the submission of a report by the reorganization group and with approval of the financial supervision and control department， come to an end.

Article 113 Where the payment ability of an insurance company is possibly endangered seriously or has been already endangered， because the insurance company violates the provisions of this Law and infringes the social public interests， the financial supervision and control department may take over the said insurance company.

The aim of the takeover is to take necessary measures for the insurance company taken over so as to protect the insured's interests and restore the normal operation of the said insurance company. The relation between the obligatory right and the debts of the insurance company taken over shall not change due to the takeover.

Article 114 The composition of the takeover group and the measures of implementation for takeover shall be decided by the financial supervision and control department and shall be announced publicly.

Article 115 When the term of takeover expires， the financial supervision and control department may decide to extend the term， however， the longest term of takeover may not exceed two years.

Article 116 When the term of takeover expires and the insurance company has restored its normal operation ability， the financial supervision and control department may decide to terminate the takeover.

If the takeover group thinks the property of the insurance company not sufficient to liquidate its debts， with approval of the financial supervision and control department， it shall， according to law， apply to a people's court for declaration of bankruptcy of the said insurance company.

Article 117 An insurance company shall， within three months counted from the end of each fiscal year， submit its business report， financial accounting statements and relevant statements of the previous year to the financial supervision and control department， and promulgate them according to law.

Article 118 An insurance company shall， by the end of each month， submit its business statistics report of last month to the financial supervision and control department.

Article 119 An insurance company engaged in life insurance business shall engage professional actuaries approved by the financial supervision and control department， and establish an actuarial reporting system.

Article 120 An insurer and an insured may invite independent assessment organizations established according to law， or engage experts with statutory qualifications to carry out assessment and appraisal of an insurance accident.

Article 121 An insurance company shall properly keep complete account books， original vouchers and certificates as well as relevant materials about its business operation activities.

The period of safekeeping account books， original vouchers and certificates as well as relevant materials provided in the preceding paragraph may not be shorter than 10 years counted from the date of the termination of the insurance contract.

Chapter VI Insurance Agent and Insurance Broker

Article 122 An insurance agent refers to a unit or individual that， according to the commission of an insurer， collects commission fees from the insurer and handles insurance business on behalf of the insurer within the limits of commission.

Article 123 An insurance broker refers to a unit which， for the interests of an applicant for insurance， provides intermediary service for the applicant for insurance and an insurer to make an insurance contract and collects brokerage according to law.

Article 124 An insurer shall assume the responsibility for the acts of an insurance agent in handing the insurance business on behalf of the insurer according to the authorization.

An insurance agent engaging in agency service of life insurance may not accept commission from two or more insurers concurrently.

Article 125 Where a loss， due to the mistake of an insurance broker， is caused to an applicant for insurance or an insured， the insurance broker shall bear the liability for indemnity.

Article 126 Any insurance agent or any insurance broker， when handling insurance business， may not take the advantage of its administrative power， position or occupation as well as other unfair means to force， induce or restrict an applicant for insurance to make an insurance contract.

Article 127 Any insurance agent or any insurance broker shall meet the qualification requirements stipulated by the financial supervision and control department， obtain a permit to engage in the insurance agency service or a permit to engage in the insurance brokerage service issued by the financial supervision and control department， go through registration with the administrative department for industry and commerce， receive a business licence and deposit guarantee fund or buy a professional liability insurance policy.

Article 128 Any insurance agent or any insurance broker shall have its own business place， set up special books to enter revenue and expenditure of insurance agency service or insurance brokerage service， and accept the supervision of the financial supervision and control department.

Article 129 Any insurance company shall set up a registration book in which its insurance agents are entered.

Article 130 The provisions of Articles 105， 107 and 117 of this Law shall apply to the insurance agent and the insurance broker.

Chapter VII Legal Responsibility

Article 131 Where an applicant for insurance， an insured or a beneficiary commits one of the following acts， carrying out activities of insurance deceit， which constitutes a crime， criminal responsibility shall be investigated according to law：

（1） an applicant for insurance intentionally fabricates the subject-matter insured so as to defraud of the insurance；

（2） falsifying the happening of an insurance accident which has not occurred so as to defraud of the insurance；

（3） intentionally causing an insurance accident which inflicts a loss on property so as to defraud of the insurance；

（4） intentionally causing a life insurance accident such as death， injury， disability or disease of the insured so as to defraud of the insurance； or

（5） forging or altering proofs， materials or other evidences relating to the insurance accident， or instigating， inducing or paying others to provide false proofs， materials or other evidences， fabricating false causes， or exaggerating the degree of losses so as to defraud of the insurance.

Whoever commits one of the acts listed in the preceding paragraph， if the circumstances are minor and the act does not constitute a crime， shall be given administrative penalties according to relevant regulations of the state.

Article 132 Where an insurance company and its employee（s）， in insurance business， conceal important information relating to an insurance contract， cheat an applicant for insurance， an insured or a beneficiary， or refuse to perform the liability of indemnity or payment of insurance as contracted and this act constitutes a crime， criminal responsibility shall be investigated according to law； if no crime is constituted， the financial supervision and control department shall impose a fine of from 10，000 yuan to 50，000 yuan on the said company， and give the employee（s） having violated the law disciplinary sanctions and impose a fine below 10，000 yuan concurrently.

Where an insurance company and its employee（s） hinder an applicant for insurance from performing the obligation of really informing or induce an applicant for insurance into not performing the obligation of really informing， or promise an applicant for insurance， an insured or a beneficiary of offering illegal insurance premium rebate or other interests， the financial supervision and control department shall order them to correct and impose a fine of from 10，000 yuan to 50，000 yuan on the said company， and take disciplinary sanctions against the employee（s） having violated the law and impose a fine below 10，000 yuan concurrently.

Article 133 Where an insurance agent or an insurance broker cheats an applicant for insurance， an insured or a beneficiary， during business activities， the financial supervision and control department shall order it to correct， and impose thereon a fine of from 10，000 yuan to 50，000 yuan concurrently； if the circumstances are serious， the financial supervision and control department shall revoke its permit to engage in insurance agency service or its permit to engage in insurance brokerage service. If a crime is constituted， criminal responsibility shall be investigated according to law.

Article 134 Where any employee of an insurance company， taking the advantage of duties， intentionally fabricates an insurance accident not occurred and makes false indemnity so as to defraud of insurance， criminal responsibility shall be investigated according to law.

Article 135 Whoever， in violation of the provisions of this Law， and without approval， establishes an insurance company or engages in illegally commercial insurance business activities， shall be investigated for criminal responsibility according to law， and the financial supervision and control department shall ban this illegal operation. If the circumstances are minor， and no crime is constituted， administrative penalties shall be given against him.

Article 136 Any one， in violation of the provisions of this Law， engages in the insurance business beyond the business scope checked and ratified， the financial supervision and control department shall order him to correct and to return the insurance premium already collected， and confiscate his illegal gains， if he has such illegal gains， and imposed a fine of from one time to five times of the illegal gains concurrently； if he has no illegal gains， the department shall impose a fine of from 100，000 yuan to 500，000 yuan on him； if he fails to make correction beyond the specified time limit， and causes serious consequences， the department shall order him to suspend his business for rectification or revoke his permit to engage in the insurance business.

Article 137 Where an insurance company， in violation of the provisions of this Law， makes unauthorized changes of such matters as the company's designation， articles of association， registered capital or business place of the company or its branch， the financial supervision and control department shall order it to make correction and impose a fine of from 10，000 yuan to 100，000 yuan on it concurrently.

Article 138 Where an insurance company， in violation of the provisions of this Law， commits one of the following acts， the financial supervision and control department shall order it to make correction， and impose a fine of from 50，000 yuan to 300，000 yuan on it concurrently； and if the circumstances are serious， the financial supervision and control department may restrict the company's business scope and order it to stop accepting new business or revoke its permit to engage in the insurance business：

（1） failing to deposit guarantee fund according to regulations or putting， in violation of regulations， the guarantee fund to use；

（2） failing to withdraw or carry forward undue liability reserve fund according to regulations or failing to with draw outstanding loss reserve according to regulations；

（3） failing to withdraw insurance guarantee fund and accumulation fund according to regulations；

（4） failing to handle outward reinsurance business according to regulations；

（5） using capital of the insurance company in involution of regulations；

（6） setting up branches or representative offices without approval； or

（7） splitting or merging without approval.

Article 139 Where an insurance company， in violation of the provisions of this Law， commits one of the following acts， the financial supervision and control department shall order it to make correction and impose a fine of from 10，000 yuan to 100，000 yuan if the company fails to make correction within the specified time limit：

（1） failing to submit， according to the regulations， relevant reports， statements， documents and materials； or

（2） failing to submit， according to the regulations， the insurance clauses and insurance premium rates of the planned kinds of risks for the record.

Article 140 Whoever， in violation of the provisions of this Law， commits one of the following acts， shall be ordered to make correction and imposed a fine of from 100，000 yuan to 500，000 yuan by the financial supervision and control department：

（1） providing false reports， statements， documents or materials； or

（2） refusing or hindering inspection and supervision carried out according to law.

Article 141 Whoever， in violation of the provisions of this Law， commits one of the following acts， shall be ordered to make correction and imposed a fine of from 50，000 yuan to 300，000 yuan by the financial supervision and control department：

（1） accepting excess insurance and the circumstances are serious； or

（2） accepting insurance in which death is the prerequisite of payment of insurance for a person without civil capacity.

Article 142 Any one， in violation of the provisions of this Law， illegally engages in insurance agency service or insurance brokerage service without receiving a permit to engage in the insurance agency service or a permit to engage in the insurance brokerage service， the financial supervision and control department shall declare a ban on his business， confiscate his illegal gains and impose on him a fine of from five to ten times of his illegal gains. If a crime is constituted， criminal responsibility shall be investigated according to law.

Article 143 With respect to the insurance company's senior managerial personnel and other persons being directly responsible for the act which violates the provisions of this Law but does not constitute a crime， the financial supervision and control department shall， according to the specific circumstance， give a warning， order to replace those persons or impose a fine of from 5，000 yuan to 30，000 yuan.

Article 144 Whoever， in violation of the provisions of this Law， causes damage or loss to others， shall bear civil responsibility according to law.

Article 145 Whoever approves an application for establishment of an insurance company which fails to meet the requirements for establishment provided in this Law or approves an application for insurance agent or insurance broker which fails to meet the requirements for agency or brokerage， shall be given disciplinary sanctions； if the circumstances are serious and a crime is constituted， criminal responsibility shall be investigated according to law.

Article 146 If any one of the working personnel of the financial supervision and control department， in exercising supervision and control over the insurance business， abuses his duty and power， practices favoritism for personal gains or neglects his duty of office and his act constitutes a crime， criminal responsibility shall be investigated according to law； if no crime is constituted， disciplinary sanctions shall be given thereto.

Chapter VIII Supplementary Provisions

Article 147 The relevant provisions of the Maritime Code shall apply to marine insurance； and in absence of the provisions in the Maritime Code， the relevant provisions of this Law shall apply.

Article 148 The provisions of this Law shall apply to the establishment of insurance companies with foreign investment， or branch companies of foreign insurance companies within the territory of China； the provisions separately provided by other laws and administrative regulations shall apply.

Article 149 The state supports the development of the insurance business which serves agricultural production. Agricultural insurance shall be provided separately by laws and administrative regulations.

Article 150 Laws and administrative regulations shall separately institute regulations on insurance organizations of other nature than those insurance companies provided by this Law.

Article 151 Those insurance companies which， in accordance with the regulations of the State Council， were ratified to be established prior to the enforcement of this Law， shall continue to remain. Among them， those which fail to meet completely the requirements provided by this Law shall come up to such requirements within a prescribed time limit. The State Council shall formulate the concrete measures.

Article 152 This Law shall enter into force on October 1， 1995.