In order to accelerate the development of Shanghai as an international reinsurance center and promote the high-quality growth of China's reinsurance market, the National Financial Regulatory Administration, in collaboration with the Shanghai Municipal People's Government, has jointly issued the "Several Measures on Accelerating the Construction of Shanghai International Reinsurance Center." Officials from the relevant departments of the National Financial Regulatory Administration and the Shanghai Municipal People's Government have responded to media inquiries regarding these measures.

Background and Rationale for the Measures

The establishment of Shanghai as an international reinsurance hub represents a major strategic initiative set forth by the central authorities. In recent years, the National Financial Regulatory Administration and the Shanghai Municipal People's Government have worked closely together, issuing multiple specialized support policies to provide a framework for this development. The formal issuance of the "Several Measures" aims to expedite the construction of the Shanghai International Reinsurance Center, address market concerns, and drive the high-quality advancement of China's reinsurance sector.

Key Components of the Measures

The "Several Measures" comprise eight key areas, focusing on guiding institutional setup, enhancing a unified registration system, accelerating platform development, boosting capacity supply, deepening reform and opening-up, expanding cross-border cooperation, strengthening regulatory effectiveness, and optimizing the development environment.

The first aspect involves guiding institutional layout to foster the concentration of market elements. It aims to optimize the distribution of institutions and facilitate the smooth flow and efficient allocation of various resources within the China (Shanghai) Pilot Free Trade Zone Lingang Special Area. This includes encouraging large enterprises to centrally manage their risk protection needs in the Lingang area to promote precise matching of risks and underwriting capacity. Leveraging the policy advantages of the Lingang area, it supports insurance institutions in strengthening cooperation and exchanges to accelerate the formation of a reinsurance market ecosystem.

The second aspect focuses on improving the unified registration system and speeding up platform construction. It promotes the unified registration of reinsurance contracts and claim settlements by domestic insurance institutions at the Reinsurance Registration and Trading Center. Support is given to the Center to further refine data registration standards, implement tiered data classification management, enhance data governance and security, and deepen data application. The measures also support relevant overseas financial institutions in conducting referral activities through the Center. Efforts will be made to optimize on-exchange trading functions, standardize reinsurance contracts and statements, and develop an efficient and transparent digital trading platform.

The third aspect aims to increase capacity supply and deepen reform and opening-up. It supports reinsurance institutions in raising capital through share issuance and supplementary capital instruments. The insurance industry is guided to aggregate underwriting capacity around national major projects and strategic emerging industries. Reinsurance institutions are encouraged to assist the insurance sector in risk reduction services. The measures explore broadening channels for dispersing special risks, such as catastrophe risks. Support is provided for insurance institutions to open dedicated accounts in the Lingang area and utilize relevant overseas investment facilitation policies. Data security management policies will be implemented, with updates to operational guidelines for reinsurance data outbound transfer, optimizing cross-border data services.

The fourth aspect involves expanding cross-border cooperation to enhance international influence. Building on the Lingang area's advantages in cross-border activities, the measures aim to attract insurance institutions to explore new growth markets and improve their management capabilities for cross-border inward business. Support is given for introducing advanced risk modeling and underwriting expertise to cultivate core technologies. The international reinsurance consultation mechanism will be improved to create a platform for global expertise and a window for expanding openness, showcasing the progress of the Shanghai International Reinsurance Center and continuously boosting its international profile.

The fifth aspect focuses on strengthening regulatory effectiveness and optimizing the development environment. It emphasizes holding insurance institutions accountable for their primary responsibilities, urging them to establish sound internal control and compliance management systems. The regulatory efficacy of the National Financial Regulatory Administration will be enhanced, with prudent regulatory rules for the reinsurance sector being refined. Support is provided for the Shanghai Local Financial Regulatory Bureau to research and establish a monitoring system commensurate with reinsurance risks. The Reinsurance Registration and Trading Center will play a role in assisting supervision to improve the quality and effectiveness of reinsurance oversight. Shanghai will further optimize incentive policies for institutions and refine dedicated talent policies. Exploration will be conducted to establish a reinsurance arbitration mechanism within the Lingang area.

Significance of the Measures' Release

Overall, the construction of the Shanghai International Reinsurance Center has achieved phased progress, becoming a crucial driver in building a modern reinsurance market system and an integral component of Shanghai's development as an international financial center. The "Several Measures" primarily address accelerating the formation of the reinsurance market ecosystem, stimulating business activity, enhancing support for major projects, and strengthening risk prevention barriers, thereby responding to market concerns and sending a positive signal. The release of these measures is conducive to deepening coordination between central and local authorities, consolidating efforts, fostering a development momentum of continuous advancement and implementation, and persistently improving the top-level design for the reinsurance center's construction.