U.S.-China Deal Text Creates Confusion Over Insurance Opening
Added 01-16-20 03:04:02am EST - “(Bloomberg) -- A trade pact opening up China's insurance sector to U.S. firms has caused confusion among lawyers in the Asian nation.China pledged to remove the foreign-equity cap for the life, pension and health-coverage sectors…” - Finance.yahoo.com
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(Bloomberg) -- A trade pact opening up China’s insurance sector to U.S. firms has caused confusion among lawyers in the Asian nation.
China pledged to remove the foreign-equity cap for the life, pension and health-coverage sectors no later than April 1, according to the text of a broad trade agreement announced Wednesday. However, lawyers in China say they thought the limit had already been lifted on Jan. 1.
The confusion stems from life insurance in China being colloquially used to cover a host of areas including health and disability, distinct only from non-life coverage of things such as property and automobiles. Local companies offer specialized cover for life, health and pension through separate units.
China has said it lifted foreign ownership restrictions on “life insurers” at the beginning of the year, which was understood by many to indicate it was removing limits for all three sectors. It’s unclear why health insurance and pensions were introduced separately in the trade deal, according to lawyers who spoke with Bloomberg and didn’t want to be identified discussing a government decision.
Whether January or April, the import remains the same. Foreign firms will soon be able to make an aggressive bid to wrest business from dominant local players including China Life Insurance Co. and Ping An Insurance (Group) Co.
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