Article 1  These Regulations are formulated in accordance with laws and
administrative regulations including the Insurance Law of the
People‘s Republic of China and the Securities Law of the
People‘s Republic of China in order to strengthen
administration of the stock investment of insurance
institutional investors, standardize investment activities,
prevent investment risks and safeguard the interests of the
insured.

Article 2 “Insurance institutional investors” in these Regulations refer
to insurance companies and insurance asset management
companies that satisfy the requirements specified by the China
Insurance Regulatory Commission (hereinafter referred to as
the “CIRC”) and are engaged in stock investment. These
Regulations shall apply to the stock investment of insurance
group companies and insurance holding companies.
“Stock investment” in these Regulations refers to an insurance
institutional investor‘s activities of trading or entrusting
qualified institutions to trade stock market products
including stocks and convertible corporate bonds.
“Stock asset custody” in these Regulations refers to an
insurance company‘s activities of signing a custody agreement
with a commercial bank or with another specialized financial
institution in accordance with relevant stipulations of the
CIRC and entrust it to keep custody of the stocks and funds
for stock investment and to be responsible for clearing,
settlement, asset evaluation and investment supervision etc.

Article 3  When carrying out stock investment, an insurance institutional
investor shall establish an independent custody mechanism,
follow the principles of prudence, safety and value increase,
operate independently at its own risk and assume sole
responsibility for its profits or losses.

Article 4  The CIRC and the China Securities Regulatory Commission
(hereinafter referred to as the “CSRC”) shall, in accordance
with their respective responsibilities, conduct supervision
and administration of the stock investment activities of
insurance institutional investors.
Chapter 2 Qualification Requirements
Article 5
To accept entrustment and be engaged in stock investment, an
insurance asset management company shall satisfy the following
requirements:
1. Its internal management system and risk control system
comply with the stipulations of the Guidelines for Risk
Control of Utilization of Insurance Funds;
2. Having an independent trading department;
3. Relevant senior managerial personnel and main business
personnel satisfy the requirements specified in these
Regulations;
4. Having a specialized investment analysis system and a
speicialized risk control system;
5. Other requirements specified by the CIRC.

Article 6
Subject to approval of the CIRC, an insurance company that
satisfies the following requirements may entrust relevant
insurance asset management companies that satisfy the
requirements specified in Article 5 hereof to carry out stock
investment:
1. Solvency margin complies with relevant stipulations of the
CIRC;
2. Internal control system and risk control system comply with
the stipulations of the Guidelines for Risk Control of
Utilization of Insurance Funds;
3. Having a special department responsible for insurance funds
entrustment affairs;
4. Relevant senior managerial personnel and main business
personnel satisfy the requirements specified in these
Regulations;
5. Having established a stock asset custody mechanism;
6. No record of major violation of laws or regulations in
investment in the past 3 years;
7. Other requirements specified by the CIRC.
Article 7
Subject to approval of the CIRC, an insurance company that
satisfies the following requirements may be engaged in stock
investment directly:
1. Solvency margin complies with relevant stipulations of the
CIRC;
2. Internal control system and risk control system comply with
the stipulations of the Guidelines for Risk Control of
Utilization of Insurance Funds;
3. Having a specialized department for fund utilization;
4. Having an independent trading department;
5. Having established a stock asset custody mechanism;
6. Relevant senior managerial personnel and main business
personnel satisfy the requirements specified in these
Regulations;
7. Having a specialized investment analysis system and a
specialized risk control system;
8. No record of major violation of laws or regulations in
investment in the past 3 years;
9. Other requirements specified by the CIRC.
Article 8
To apply for direct engagement in stock investment or for
entrusting an insurance asset management company to carry out
stock investment, an insurance company shall submit the
following documents and materials in triplicate to the CIRC:
1. Application letter;
2. Resolution of the board of directors on stock investment;
3. Internal management system, risk control system and
internal organization setup;
4. Materials about the stock asset custodian and the draft
custody agreement;
5. The name list and resumes of relevant senior managerial
personnel and main business personnel;
6. Financial statements of the previous 3 years audited by an
accounting firm;
7. Current trading seat, securities account and funds account;

8. Stock investment strategy, which shall at least explain the
conception of stock investment, the investment objective and
the investment portfolio;
9. Other documents and materials required by the CIRC.
Where an insurance company applies for direct engagement in
stock investment, it shall submit in addition the descriptions
of relevant investment analysis system and risk control
system.

Article 9
When examining the application of an insurance company for
direct engagement in stock investment or entrusting an
insurance asset management company to carry out stock
investment, the CIRC shall make the decision to or not to
approve the application within 20 days after receiving a
complete set of application documents and materials. Where it
decides not to approve the application, it shall inform the
applicant in writing and give reasons.
The CIRC may, as it sees fit, conduct an expert review of the
application of an insurance company and inform the insurance
company in writing of the time needed for the expert review.
Article 10
Where an insurance company is directly engaged in stock
investment, it shall submit to the CIRC the official custody
agreement, the benchmark for evaluation of investment
performance and materials about the trading seat, the
securities account and the funds account within 10 days after
going through relevant procedures of stock investment.
Where an insurance company entrusts an insurance asset
management company to carry out stock investment, it shall
submit to the CIRC the entrustment agreement, the official
custody agreement, guidelines for investment, the benchmark
for evaluation of investment performance and materials about
the trading seat, the securities account and the capital
account within 10 days after going through relevant procedures
of stock investment.
In case of any change in the contents of the documents
specified in the preceding two paragraphs, the insurance
company shall report to the CIRC within 5 days after going
through the procedures of change.
The insurance company shall submit a copy of the materials
about the trading seat, the securities account and the funds
account to the CSRC simultaneously.
Chapter 3 Investment Scope and Proportion
Article 11
The stock investment of an insurance institutional investor
shall be limited to the following categories:
1. RMB common stocks;
2. Convertible corporate bonds;
3. Other investment instruments specified by the CIRC.
“RMB common stocks” mentioned in item 1 of the preceding
paragraph refer to the stocks publicly issued and listed
within the territory of China and subscribed for and traded in
RMB.
Article 12
The stock investment of an insurance institutional investor
may be carried out in the following ways:
1. Subscription in the primary market, including rights issue
based on market value, on-line or off-line subscription,
participation in placement in name of a strategic investor,
etc.;
2. Trading in the secondary market.
Article 13
The stocks of a listed company held by an insurance
institutional investor shall not reach 30% of the RMB common
stocks of the listed company.
The specific proportion of stock investment of an insurance
institutional investor shall be separately specified by the
CIRC.
An insurance asset management company shall not carry out
stock investment with its own funds.
Article 14
An insurance institutional investor shall not invest in RMB
common stocks of the following types:
1. Stocks subject to "special treatment" or "special treatment
for warning of the risk of delisting" or the delisted stocks;

2. Stocks whose price has risen by over 100% in the past 12
months;
3. Stocks suspected of manipulation;
4. Stocks whose issuer’s accounting firm refuses to give
opinions about or gives reserved opinions about the issuer’s
financial statement of the previous year;
5. Stocks whose issuer has disclosed serious deterioration of
operation results, heavy losses or heavy losses expected in
the future;
6. Stocks whose issuer has disclosed the fact that it is being
investigated by a regulatory authority or has been seriously
punished by a regulatory authority in the past 1 year;
7. Stocks of other types specified by the CIRC.

Article 15
The balance of an insurance institutional investor‘s
investment in convertible corporate bonds shall be
incorporated in the balance of enterprise bonds investment in
accordance with relevant stipulations of the Provisional
Regulations on Administration of Insurance Companies‘
Investment in Enterprise Bonds.
After conversion into stocks, the convertible corporate bonds
held by an insurance company shall be incorporated at cost
price in the investment balance of RMB common stocks in
accordance with relevant stipulations of the CIRC on stock
investment proportion.

Article 16
For the investment account opened by an insurance
institutional investor for unit-linked insurance, the
proportion of stock investment may reach 100%.
For the investment account opened by an insurance
institutional investor for universal life insurance, the
proportion of stock investment shall not exceed 80%.
For the independent accounts opened by an insurance
institutional investor for other insurance products, the
proportion of stock investment shall not exceed the percentage
specified by the CIRC.
For the independent accounts opened by an insurance
institutional investor for the above insurance products, the
proportion of stock investment shall not exceed the specific
proportion stipulated in insurance clauses.
Chapter 4 Asset Custody
Article 17
An insurance company shall choose commercial banks or other
specialized financial institutions that satisfy the
requirements specified in the Guidelines for Stock Asset
Custody of Insurance Companies as the stock asset custodian.
Article 18
The stock asset custodian of an insurance company shall
fulfill the following obligations:
1. Keep in safe custody the funds and stock assets of the
insurance company;
2. Handle matters concerning clearing and settlement on a
timely basis in accordance with the instructions of the
insurance company or the insurance asset management company;
3. Supervise the investment operation of the insurance company
or the insurance asset management company;
4. Evaluate the value of the stock assets that the insurance
company placed in its custody;
5. Submit stock asset custody reports to the insurance company
or the insurance asset management company regularly;
6. Submit relevant statistics of the stock assets, regularly
and irregularly submit to the CIRC reports on risk assessment
and on performance assessment of the stock assets in
accordance with the supervision and administration
requirements of the CIRC;
7. Keep complete records, account books, report forms and
other relevant materials of activities of stock asset custody
business; important materials about stock assets in its
custody including vouchers, trading records and contracts
shall be kept for over 15 years;
8. Other obligations specified by the CIRC.
Article 19
The stock asset custodian of an insurance company shall
strictly separate its own assets from stock assets in its
custody and it shall open different relevant accounts for
different insurance companies and manage the accounts
separately.
Article 20
The stock asset custodian of an insurance company shall not
engage in the following activities:
1. Exercising mixed management of stock assets placed in its
custody by an insurance company and assets of its own;
2. Exercising mixed management of stock assets placed in its
custory by an insurance company and other assets in its
custody;
3. Exercising mixed management of stock assets palced in its
custody by different insurance companies;
4. Misappropriating the stock assets placed in its custody by
an insurance company;
5. Seeking benefits for itself or for a third party by taking
advantage of the stock assets placed in its custody by an
insurance company and relevant information;
6. Violation of laws, administrative regulations, relevant
stipulations of the State or the custody agreement;
7. Other activities prohibited by the CIRC.

Article 21
An insurance company shall enter into a custody agreement with
a stock asset custodian. The custody agreement shall state
clearly the following:
1. Obligations of the stock asset custodian specified in
Article 18, Article 19 and Article 20 in these Regulations;
2. Where a stock asset custodian violates the obligations
specified in Item 1 of this Article and the CIRC requires the
insurance company concerned to replace the stock asset
custodian, the insurance company has the right to terminate
the custody agreement in advance.

Article 22
Where a stock asset custodian is dissolved, closed down or
goes bankrupt in accordance with law, the stock assets placed
in its custody by an insurance company shall not be included
in the category of assets to be liquidated.

Chapter 5 Forbidden Activities of Insurance Institutional
Investors

Article 23
The scope and proportion of stock investment of an insurance
institutional investor shall not exceed those specified by the
CIRC.

Article 24
No managerial personnel of an insurance institutional investor
engaged in decision making, research, trading and clearing of
stock investment or other relevant personnel of the insurance
institutional investor shall engage in insider trading.
The insider trading mentioned in the preceding paragraph shall
be determined in accordance with the Securities Law of the
People‘s Republic of China and the Provisional Regulations on
Prohibition of Securities Fraud.

Article 25
An insurance institutional investor shall not engage in the
following activities in stock investment:
1. Transferring profits between securities accounts of
insurance funds of different nature;
2. Purchasing stocks by illegal financing;
3. Other activities specified by the CIRC.

Article 26
It is prohibited for any insurance institutional investor to
obtain illegitimate benefits or to shift risks to others by
any of the following means:
1. Carrying out combined or successive purchases or sales
independently or in collusion with others by building up an
advantage in terms of funds or shareholdings or using one’s
advantage in terms of information, thereby manipulating the
trading prices of securities;
2. Collaborating with others to mutually trade securities or
to mutually buy or sell securities not held by them, at a
prearranged time and price and by prearranged means, thereby
affecting the price or volume of the securities traded;
3. Buying or selling securities from or to oneself without
transfer of ownership of the securities by means of making
oneself the other party to the transaction, thereby affecting
the price or volume of the securities traded;
4. Manipulating the trading prices of securities by other
means.

Article 27
Where a listed company directly or indirectly holds more than
10% equity of an insurance institutional investor, the
insurance institutional investor shall not invest in stocks of
this listed company or stocks of an affiliated company of the
listed company.

Article 28
Insurance institutional investors, stock asset custodians,
securities business institutions and other securities
intermediaries shall not fabricate trading records, financial
information or other materials.

Article 29
Unless otherwise specified by the CIRC, an insurance company
shall not entrust institutions other than insurance asset
management companies to carry out stock investment.

Chapter 6 Risk Control

Article 30
An insurance institutional investor shall have the conceptions
of long-term investment and value investment; it shall
optimize its asset allocation and diversify its investment
risks.

Article 31
An insurance institutional investor shall establish a sound
and complete stock investment risk control system in
accordance with the Guidelines for Risk Control of Utilization
of Insurance Funds.

Article 32
The stock investment risk control system of an insurance
institutional investor shall at least include the following:
1. Investment decision-making process;
2. Investment authorization system;
3. Research and report system;
4. Stock scope selection system;
5. Risk assessment and performance assessment index systems;
6. Code of professional ethics;
7. Mechanism for handling sudden occurrence of major events.
Where an insurance company entrusts an insurance asset
management company to carry out stock investment, the stock
investment risk control system of the insurance company shall
at least include the stock custody system in addition.
Where an insurance company is directly engaged in stock
investment, its stock investment risk control system shall at
least include the stock custody system, the stock trading
management system and the information management system in
addition.
The stock investment risk control system of an insurance asset
management company shall at least include the stock trading
management system and the information management system in
addition.
Article 33
When investing in stocks, an insurance institutional investor
shall prepare a written research report before making any of
the following important decisions:
1. The amount of funds for a single investment exceeds what is
determined by the institutional investor;
2. An investment that involves more than 5% of investable
stock assets;
3. Investment portfolio or investment direction needs material
adjustment;
4. Criteria for selection of stock scope needs material
adjustment;
5. The risk tolerance of stock investment needs material
adjustment.

Article 34
When determining the scope of investable stocks, an insurance
institutional investor shall consider all indexes of a listed
company including governance structure, earning power,
information transparency and stock liquidity.
The insurance institutional investor shall make stock
investment within the scope of investable stocks.
Article 35
An insurance institutional investor shall determine the
benchmark for evaluating the performance of stock investment
before making an investment and take as reference the indexes
of stocks with good performance, blue chips and stocks with
strong liquidity.
The benchmark for evaluating the performance of stock
investment of the insurance industry shall be separately
specified by the CIRC.
Article 36
When utilizing the following funds, an insurance institutional
investor shall respectively open a securities account and a
funds account for each of the following types of funds and
conduct separate accounting of the accounts:
1. The funds of traditional insurance products;
2. The funds of participating insurance products；
3. The funds of universal insurance products;
4. The funds of unit-linked insurance products;
5. The funds of insurance products subject to independent
accounting as specified by the CIRC.

Article 37
An insurance asset management company and an insurance company
directly engaged in stock investment shall trade stocks
through independent seats. Regulations on administration of
independent seats of stock trading shall be separately
formulated.

Article 38
Stock trading instructions of an insurance asset management
company and those of an insurance company directly engaged in
stock investment shall be implemented by the independent
trading department and full-time trading personnel.

Article 39
An insurance asset management company and an insurance company
directly engaged in stock investment shall establish
information management system including fire wall, post
responsibilities, access control and safety protection.

Article 40
An insurance asset management company and an insurance company
directly engaged in stock investment shall standardize the
operation procedures of stock trading systems including
facilities of computer room, communication equipment, computer
equipment, operating system software and database software.

Article 41
Where an insurance institutional investor chooses to trade
stocks through the seats of a securities business institution,
the securities business institution shall satisfy the
following requirements:
1. Good financial status, steady operation and net capital of
over RMB 1 billion;
2. Sound internal control system;
3. The funds for trading settlement of its customers are fully
deposited into commercial banks with qualification of deposit
and custody for funds for securities trading settlement;
4. Having opened settlement deposit accounts for its own
trading settlement and settlement deposit accounts for its
customers’ trading settlement separately with China Securities
Registration and Settlement Company Ltd.;
5. Having set up seats for its proprietary business and seats
for its non-proprietary business separately in Shanghai Stock
Exchange and Shenzhen Stock Exchange;
6. Communication conditions and trading facilities are
efficient, safe and meet the requirements of stock trading,
and its information services are comprehensive;
7. Capable of securities market research and able to provide
consulting services in time;
8. Having no record of major violation of laws or regulations,
having not been punished by the CSRC in the past 3 years and
not being filed or investigated;
9. Having no record of dishonesty, no activities of occupying
and using, or misappropriating customers‘ guaranty funds or
securities in the previous year;
10. Making written promises to accept the inspection of the
stock trading status of the insurance institutional investor
by the CIRC and truthfully submit various materials about the
stock trading of the insurance institutional investor to the
CIRC;
11. Its local business departments are managed in a
standardized manner, operate well and have complete service
functions;
12. Other requirements specified by the CIRC.
Article 42
Where an insurance institutional investor chooses to trade
stocks through the seat of a business department of a
securities business institution, it shall enter into relevant
agreement with the head office of the business department. The
agreement shall state clearly the obligations of the
securities business institution specified in Item 10 of
Article 41 in these Regulations. Where the securities business
institution violates the aforesaid obligations and the CIRC
requires the insurance institutional investor to replace the
securities business institution, the insurance institutional
investor shall have the right to terminate the agreement in
advance.
The insurance institutional investor shall submit the copy of
the agreement to the CIRC within 5 days after signing the
agreement specified in the preceding paragraph.
Article 43
An insurance asset management company and an insurance company
directly engaged in stock investment shall, every day before
the opening of the market, verify the balance of securities
and the balance of funds with the stock asset custodian to
ensure that the balance of securities and the balance of funds
are sufficient for settlement.
Article 44
Where any of the cases set forth in Article 14 in these
Regulations occurs to the stocks held by an insurance
institutional investor, the insurance institutional investor
shall formulate specific shemes to solve the problem.
Article 45
Where the operating status of an insurance company changes and
the requirements specified in these Regulations are not
satisfied, the insurance company shall not hold more stocks
and shall lower the proportion of stock investment within the
time limit and in the manner specified by the CIRC.
Article 46
An insurance institutional investor shall reveal the risk
status of stock investment by adopting Value-at-Risk and other
risk measurement indexes.
Article 47
The fund transfer and expense payment among insurance
companies, insurance asset management companies, stock asset
custodians and securities business institutions shall be
conducted by means of transferring between accounts.
Article 48
The senior managerial personnel of an insurance institutional
investor responsible for stock investment shall satisfy the
following requirements:
1. Undergraduate diploma or above;
2. More than 5 years of work experience in securities or
finance;
3. Familiar with the operation of securities investment and
have necessary financial and legal knowledge;
4. Other requirements specified by the CIRC.

Article 49
A senior meangerial personnel of an insurance institutional
investor shall make decisions concerning stock investment
strictly within the scope of authority specified in the
internal management system and risk control system. Any
investment decision-making beyond the scope of authority is
strictly prohibited.

Article 50
The main business personnel of an insurance institutional
investor engaged in stock investment shall satisfy the
following requirements :
1. Undergraduate diploma or above;
2. More than 3 years of work experience in the field of
securities or finance;
3. Familiar with the rules and operation procedures of
securities business;
4. Other requirements specified by the CIRC.

The main business personnel mentioned in the preceding
paragraph refer to the supervisors and main operational
personnel engaged in stock investment.

Article 51
An insurance asset management company and an insurance company
directly engaged in stock investment shall have main business
personnel engaged in stock investment of a quantity matching
the scale of stock investment as well as research personnel of
corresponding quantity in the field of macroeconomy, industry
analysis, financial engineering, etc.
Where the stock assets utilized by an insurance asset
management company or by an insurance company directly engaged
in stock investment exceed RMB 100 million, the main business
personnel engaged in stock investment shall be no less than 5.


Article 52
A person of any of the following cases shall not act as the
senior managerial personnel or main business personnel of an
insurance institutional investor responsible for stock
investment:
1. Having received a sentence for crimes including corruption,
bribery, encroachment or misappropriation of property or
sabotage of social economic order, etc.;
2. Having received an administrative penalty or a sentence due
to illegal activities including gambling, drug taking, going
whoring and fraud;
3. Senior managerial personnel of a company or enterprise that
went bankcrupt due to poor management, who bore personal
responsibility or immediate supervisory responsibility for the
bankruptcy and it has been less than 5 years from the date of
completion of the liquidation of the company or enterprise;
4. Under investigation by judicial authorities, discipline
inspection and supervision department or the CIRC;
5. A person who has outstanding due debts of a large amount;
6. A person prohibited by a financial regulatory authority
from holding a position in financial institutions within a
certain time limit and such time limit has not expired.

Chapter 7 Supervision and Administration

Article 53
The CIRC and the CSRC shall conduct inspection of the stock
investment of insurance institutional investors in accordance
with their respective responsibilities.
The CIRC may employ intermediaries including accounting firms
to inspect the stock investment of insurance institutional
investors.
Article 54
An insurance institutional investor shall submit the following
report forms, reports or other documents to the CIRC in
accordance with relevant stipulations:
1. Benchmark for evaluating the performance of stock
investment;
2. Explanation of the calculation method and use of risk
indexes;
3. Relevant report forms of stock investment.
The content and means of submittal of the report forms and
reports specified in the preceding paragraph shall be
separately stipulated by the CIRC.

Article 55
An insurance institutional investor shall disclose relevant
information about stock investment in the manner specified by
the CIRC.

Article 56
When carrying out stock investment, an insurance institutional
investor shall abide by laws, administrative regulations and
relevant stipulations of the State and accept the supervision
and administration of their market trading conducts by the
CSRC.

Article 57
Where an insurance institutional investor violates laws,
administrative regulations or the CIRC‘s relevant
stipulations, the CIRC may have regulatory conversations with
or question relevant senior managerial personnel and main
business personnel. Where the circumstances are serious, the
CIRC may give a warning, fine or order the investor to replace
relevant managerial personnel and main business personnel in
accordance with the law.

Article 58  Where an insurance institutional investor violates laws, administrative regulations or relevant stipulations, the CIRC and the CSRC may impose administrative penalties on it.

Article 59  Where a stock asset custodian or a securities business institution specified in these Regulations violates laws, administrative regulations or relevant stipulations of the State, relevant regulatory authorities shall impose administrative penalties on it within the scope of their respective authority and supervision and administration responsibilities.
Where the stock asset custodian and the securities business institution mentioned in the preceding paragraph violates these Regulations seriously, the CIRC may order the insurance institutional investor concerned to replace the stock asset custodian and securities business institution.

Chapter 8 Supplementary Provisions

Article 60 The "day" mentioned in these Regulations refers to working day, excluding legal holidays.

Article 61 These Regulations shall come into effect from the date of promulgation.

Bright Jon  Attorney-at-law   Fax: +86-512-53516040
email@colaw.cn