Insurance companies are not allowed to close down. If it cannot continue to operate within a certain period of time, the court will declare it bankrupt. If an insurance company is declared bankrupt by the court, all its business will be entrusted to another insurance company designated by the China Insurance Regulatory Commission to continue after-sales service or go through the formalities of surrender. An insurance company is dissolved due to division, merger or resolution of shareholders' meeting. If an insurance company is unable to pay its due debts and obviously lacks solvency, it may apply for reorganization, reconciliation or bankruptcy liquidation. An insurance company needs to be dissolved due to division or merger, or the shareholders' meeting or the shareholders' general meeting decides to dissolve, or the reasons for dissolution stipulated in the articles of association arise, and it is dissolved after being approved by the the State Council Insurance Regulatory Authority. An insurance company engaged in life insurance business shall not be dissolved except for division, merger or cancellation according to law. When an insurance company is dissolved, a liquidation group shall be established according to law for liquidation. If an insurance company goes bankrupt according to law, the bankruptcy property shall pay off its bankruptcy expenses in the following order: 1, wages owed to employees and labor insurance expenses; 2. Compensation or payment of insurance benefits; 3. tax arrears; 4. Pay off the company's debts. Therefore, before the insurance company goes bankrupt, it can file a civil lawsuit with the court, and after the court hears it, it can ask the insurance company for compensation. The compensation will be borne by the funds liquidated by their company. If the liquidation funds are insufficient for compensation, the directors of the insurance company shall bear joint liability. If it is after the bankruptcy of the insurance company, the contract is invalid because of the bankruptcy of the company. If the bankruptcy property is insufficient to pay off the repayment requirements in the same order, it shall be distributed in proportion. The wages of directors, supervisors and senior managers of bankruptcy insurance companies shall be calculated according to the average wages of employees of the company. If an insurance company engaged in life insurance business is revoked or declared bankrupt according to law, its life insurance contract and liability reserve must be transferred to other insurance companies engaged in life insurance business; If the transfer agreement cannot be reached with other insurance companies, the insurance company operating life insurance business designated by the State Council Insurance Regulatory Authority shall accept the transfer. Usually, compensation is paid by the insurance guarantee fund, as follows: 1. Property insurance, short-term health insurance and short-term accidental injury insurance, if the compensation amount is less than 50 thousand, individuals can get full assistance; If it exceeds 50,000, individuals can get 90% assistance, and institutions can get 80% assistance. 2. For personal insurance contracts, long-term health insurance contracts, long-term accident insurance contracts and annuity insurance, if the applicant is an individual, the amount of assistance shall be limited to 90% of the benefits of the transferred policy; If the applicant is an institution, the amount of assistance shall be limited to 80% of the benefits of the transferred policy. Involving universal insurance and investment-linked insurance, it shall be stipulated separately. Even if the insurance company goes bankrupt, the benefits of a single policy are still guaranteed, especially the benefits written into the contract, and the subsidies are relatively high. The law is based on Article 2 of the Enterprise Bankruptcy Law of the People's Republic of China. If an enterprise as a legal person is unable to pay off its due debts, its assets are insufficient to pay off all its debts or it obviously lacks solvency, it shall clear up its debts in accordance with the provisions of this Law. An enterprise as a legal person may be reorganized in accordance with the provisions of this law if it has the circumstances specified in the preceding paragraph or obviously loses its solvency. Insurance Law of People's Republic of China (PRC) (revised on 20 15) Article 90 If an insurance company falls under the circumstances stipulated in Article 2 of the Enterprise Bankruptcy Law of the People's Republic of China, with the consent of the insurance regulatory agency of the State Council, the insurance company or its creditors may apply to the people's court for reorganization, reconciliation or bankruptcy liquidation according to law; The State Council insurance supervision and administration institution may also apply to the people's court for reorganization or bankruptcy liquidation of the insurance company according to law. Article 91 After paying off bankruptcy expenses and beneficial debts first, the bankrupt property shall be paid off in the following order: (1) Wages, medical care, disability allowance and pension expenses owed to employees, basic old-age insurance and basic medical insurance expenses owed to employees' personal accounts, and compensation payable to employees according to laws and administrative regulations; (2) Compensation or payment of insurance benefits; (3) Social insurance premiums and taxes owed by insurance companies other than those specified in Item (1); (4) Ordinary bankruptcy claims. If the bankruptcy property is insufficient to pay off the repayment requirements in the same order, it shall be distributed in proportion. The wages of directors, supervisors and senior managers of bankruptcy insurance companies shall be calculated according to the average wages of employees of the company.
Validation of laws and regulations: June 2024 17