China grants market access to first fully-owned foreign insurer

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Allianz, the German insurance giant, received approval to establish China's first foreign insurance holding company, the country's top banking and insurance regulator said in a notice on Sunday.

The China Banking and Insurance Regulatory Commission (CBIRC) also permitted Hong Kong's Chiyu Bank to set up a branch in Shenzhen, bringing the total number of approvals for foreign financial institutions to set up local subsidiaries to 12.

The regulator said it would steadily expand the opening up of China's financial sector, while at the same time improve its risk prevention and supervision capabilities.

Allianz chief executive Oliver Bate said in a statement that the move was a “significant milestone” and the group expected the holding company to be established in 2019 in Shanghai.

Chinese President Xi Jinping said in Shanghai earlier this month during the first China International Import Expo that China would work to broaden market access for foreign players while boosting imports and strengthening intellectual property rights.

The banking regulator said it has recently given the go-ahead for Taiwan's Fubon Bank, ICBC-AXA Assurance Co., Ltd. and the Korean Reinsurance Co to set up local units.

The regulator issued draft guidelines late last year to help promote foreign investment in the financial sector, cutting red tape and creating a level playing field for foreign institutions to set up branches, raise debt and hire senior executives.

(With input from Reuters)