Cctv newsAccording to the website of the China Insurance Regulatory Commission, recently, the China Insurance Regulatory Commission issued the Guidelines for the Articles of Association of Insurance Companies (hereinafter referred to as the Guidelines). The person in charge of the relevant departments of the CIRC answered questions from reporters.
1. What is the background of the promulgation of the Articles of Association Guidelines?
The articles of association of an insurance company is an important legally binding document that regulates the organization and behavior of the company and stipulates the rights and obligations of the company and its shareholders, directors, supervisors and management, and is the institutional basis for regulating the corporate governance structure. The CIRC attaches great importance to the fundamental role of the articles of association in regulating corporate governance. In 2008, it issued the Opinions on Regulating the Articles of Association of Insurance Companies, which played an important guiding role in regulating the contents of the articles of association of insurance companies and clarifying the procedures for formulating and amending the articles of association. However, judging from the governance risk problems of some insurance companies in recent years, some basic systems of corporate governance still have weak links, especially the articles of association, which is the "basic law" of the company, are still incomplete and imperfect, leaving hidden risks for the operation of corporate governance. It is urgent to further standardize the formulation of articles of association, grasp the original institutional arrangements of corporate governance, and enhance the effectiveness of corporate governance.
The purpose of formulating the Articles of Association Guidelines this time is to strengthen the supervision and guidance of insurance companies by standardizing the necessary provisions of the articles of association, provide a normative template for insurance companies to formulate articles of association on the basis of adhering to corporate autonomy, strengthen the structural foundation of insurance company governance, and further consolidate the long-term mechanism of risk prevention.
2. What is the significance of the Articles of Association Guidelines for strengthening corporate governance supervision?
The publication of the Guidelines for Articles of Association is another important measure taken by our association to prevent the source of corporate governance risks and consolidate the foundation of corporate governance structure, which is of great significance to further improve the corporate governance mechanism and enhance the effectiveness of corporate governance.
First, it is conducive to resolving the hidden risks of corporate governance. From the practice of insurance company governance and typical risk cases, some companies’ articles of association are missing basic items, the authorization mechanism is unclear or excessive, general and long-term authorization, the replacement and replacement mechanism of the company’s key personnel is unclear, the nomination mechanism of directors is missing, and the "living will" is missing, which leaves hidden risks in the company’s governance operation and becomes an important source of corporate governance deadlock, insider control and imbalance of governance mechanism. The Articles of Association Guidelines standardize the necessary clauses of the articles of association of insurance companies, which is helpful to strengthen the structural foundation of corporate governance and prevent and resolve the hidden risks of corporate governance from the source.
Second, it is conducive to strengthening the regulatory constraints of corporate governance. The Articles of Association Guidelines focus on the main risks of corporate governance operation and the outstanding problems in the formulation of articles of association. Based on laws and normative documents, taking public companies as standards, taking full account of the characteristics of the industry on the basis of adhering to corporate autonomy, it clarifies the necessary provisions of the articles of association of insurance companies. The Articles of Association Guidelines put forward clear requirements for the formulation of the articles of association of insurance companies, and also provided an institutional basis for the regulatory agencies to review the articles of association, which was helpful to promote the transformation of corporate governance supervision from "flexible guidance" to "rigid restraint" and further enhance the binding force of corporate governance supervision.
Third, it is conducive to enriching corporate governance supervision tools. In recent years, the China Insurance Regulatory Commission has issued more than 20 measures for corporate governance supervision system. The Guidelines for Articles of Association are conducive to effectively combining the regulatory requirements with the articles of association of the company, prompting the company to clarify the main links of the governance mechanism in the form of articles of association, internalizing the regulatory requirements into the internal requirements of the company, giving full play to the role of the Basic Law and promoting more rigorous and standardized corporate governance. At the same time, the Guidelines for Articles of Association further enriched the exploration of corporate governance supervision and became an important starting point and an effective means to strengthen corporate governance supervision and prevent corporate governance risks.
3. What are the main contents of the Guidelines for Articles of Association?
The Guidelines for Articles of Association consists of 14 chapters and 82 articles, which improve the necessary clauses that insurance companies should include in formulating articles of association. In addition to the contents required by the Company Law and Opinions on Standardizing the Articles of Association of Insurance Companies, the main risk points in corporate governance operation are clearly defined.
The first is about the rights and obligations of shareholders. In addition to the basic rights enjoyed by shareholders, the Guidelines for the Articles of Association require the company to clarify that shareholders have the right to nominate directors and supervisors in accordance with laws, regulations and regulatory provisions, and set out specific nomination rules; It is clear that shareholders have the right to directly report to the CIRC when directors, supervisors and senior managers violate laws and regulations and cause losses to the company or damage the interests of shareholders. In addition to the basic obligations that shareholders should bear, it is clear that shareholders should take and cooperate with the regulatory authorities to take measures when the company’s solvency is insufficient, risk events or major violations occur; Clearly require that the pledge of shareholders shall not harm the interests of other shareholders and the company, and shall not stipulate that the pledgee or its related parties shall exercise the voting rights; It puts forward clear requirements for timely reporting of major changes in shareholders themselves and related relationships with other shareholders. At the same time, the fiduciary duty of the controlling shareholder is also required to be regulated in the articles of association.
The second is about the authorization mechanism. The Guidelines for Articles of Association respectively refine the specific functions and powers of the shareholders’ meeting and the board of directors, and authorize the company to formulate the functions and powers of the general manager according to the situation. For major foreign investment, major asset purchase, disposal and write-off of major assets that need to be reviewed and approved by the shareholders’ meeting, and related matters that need to be reviewed and approved by the board of directors within the scope authorized by the shareholders’ meeting, it is required to specify the specific quota ratio or specific content scope in the articles of association. At the same time, it is clear that the statutory authority of the shareholders’ meeting shall not be exercised by the board of directors or other institutions or individuals through authorization, and the statutory authority of the board of directors shall not be granted to the chairman or other individuals in principle. If necessary, it shall be authorized on a case-by-case basis.
The third is about the voting resolution mechanism. The Articles of Association Guidelines specify the specific matters that need to be passed by ordinary resolutions or special resolutions at the shareholders’ meeting, the avoidance principle and voting rules of related shareholders when the shareholders’ meeting and the board of directors consider related transactions, and the voting rules for the election of directors and supervisors at the shareholders’ meeting. It is stipulated that when considering related party transactions, related directors shall not exercise voting rights, nor shall they exercise voting rights on behalf of other directors. Related shareholders shall not participate in voting, and the number of shares with voting rights they represent shall not be counted in the total number of valid votes. It is clear that if the company has a single shareholder (related shareholders or concerted parties) holding more than 50%, the cumulative voting system shall be implemented when electing directors and supervisors. Regarding the voting rules of the board of directors and the board of supervisors, the company is also required to stipulate them in the articles of association in accordance with relevant regulatory provisions.
The fourth is about independent directors and the board of supervisors. The Guidelines for Articles of Association require the company to specify the nomination method, duties and rights, dereliction of duty and corresponding punishment measures of independent directors in the articles of association. The company is required to specify in its articles of association that independent directors should review the fairness of major related party transactions, the implementation of internal review procedures and the impact on the rights and interests of the insured, and submit to the board of directors special powers such as convening an extraordinary general meeting of shareholders, proposing to convene the board of directors, and independently hiring external audit institutions and consulting institutions. It is stipulated that independent directors should express their opinions on special matters, and if they abstain or vote against related matters, or think that there are obstacles to expressing their opinions, they should submit written opinions to the company and report to the CIRC. The "Guidelines for Articles of Association" put forward requirements for the relevant duties, rights and obligations of supervisors and board of supervisors, and required the company to regulate them in the articles of association.
The fifth is about special matters of corporate governance. The Guidelines for Articles of Association require the company to specify the replacement and replacement mechanism of the main responsible persons such as the chairman and general manager in the articles of association to ensure that key positions and key personnel perform their duties in place. The company is required to conclude a "living will", and in the articles of association, the situation of corporate governance mechanism failure, the corrective measures that the company can take and the procedures for applying for supervision and guidance from the CIRC when the internal corrective procedures cannot solve the problem are listed in advance. It stipulates that the company, shareholders who individually or collectively hold more than one third of the company’s shares, and more than half of the directors have the right to apply to the CIRC for supervision and guidance of the company. At the same time, from the perspective of solvency supervision, the company is required to stipulate the terms promised by shareholders in the articles of association under certain circumstances. In the case of insufficient solvency of the company or the order of the China Insurance Regulatory Commission to increase capital, shareholders who cannot or do not increase capital should agree with other shareholders or investors to adopt reasonable plans to increase capital.
4. What is the scope of application of the Articles of Association Guidelines?
Considering the different organizational forms of insurance companies, there are great differences in corporate governance structure and operation. Therefore, the Articles of Association Guidelines are standardized with the articles of association of joint-stock insurance companies as the version, and the scope of application is joint-stock insurance group (holding) companies, insurance companies and insurance asset management companies, and other organizational forms of companies refer to it. Listed insurance companies should also comply with the relevant provisions of the China Securities Regulatory Commission on the articles of association of listed companies.
V. What are the next steps after the promulgation of the Guidelines for Articles of Association?
The publication of the Articles of Association Guidelines is of great significance to guide insurance companies to establish a healthy corporate governance structure and form a good corporate governance operation mechanism, and is an important measure to further strengthen the supervision of insurance companies’ governance. In the next step, around the promulgation of the Articles of Association Guidelines, we will focus on the following tasks: First, we will require the company to formulate or modify its articles of association in accordance with the requirements of the Articles of Association Guidelines. For those who apply for the preparation and opening acceptance of an insurance company, the draft articles of association shall be drafted or revised according to the requirements of the Articles of Association Guidelines, and other insurance companies shall make corresponding amendments to the articles of association before the end of 2017. Second, the company is required to explain the contents of the Articles of Association Guidelines. Under the premise of not violating the laws and regulations and the requirements of the Guidelines for Articles of Association, insurance companies are allowed to add contents to the Articles of Association or make changes in words or order to the contents stipulated in the Guidelines for Articles of Association, but the added or modified contents should be explained. Third, based on the Guidelines for Articles of Association, the examination and approval of articles of association of insurance companies will be carried out, and the compliance with articles of association will be taken as the starting point to effectively improve the compliance and effectiveness of insurance company governance.