Gasgoo.com (Shanghai May 29) - The China Insurance Regulatory Commission has reduced the minimum registration capital requirements for enterprises involved in the automobile industry to sell automobile insurance from 50 million yuan ($8.09m) to ten million yuan ($1.62m), the Nanfang Metropolis Daily reported today. The decision will lower entry barriers for prospective companies looking to establish or continue their car insurance operations.
Partially due to the complexity of the regulations at the time, the CIRC temporarily halted reviewing applications from automobile manufacturers for insurance agent qualification certificates last March. Then in June, the CIRC imposed a minimum registration capital requirement of 50 million yuan for automobile enterprises looking to sell car insurance.
The reduced requirements will make it easier for manufacturers to set up automobile insurance businesses. According to some analysts, the CIRC's decision to reduce capital requirements was made due to the fact several small 4S dealerships' insurance agent qualification certificates are on the verge of expiring. In order to ensure that their dealerships could continue providing automobile insurance, several manufacturers came out to support them over the past year.
