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China to Lift Limit of Foreign Ownership of Life Insurers

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China in November 2017 announced it would lift the current foreign ownership cap for life insurance companies to 51 percent in 2020 and remove the limit altogether two years later.

Other segments of the financial industry will see their limits relaxed even earlier. The limits for fund management companies and for securities ventures will be raised this year to 51 percent, then completely removed in three years, whereas banks and asset-management companies will see their ownership limits scrapped immediately. Banks were already allowed to operate wholly owned subsidiaries in China; it is the 25% cap on foreign ownership of domestic banks that is being removed.

China had hinted at the changes earlier in 2017. How they will translate into regulatory practice and what measures Chinese authorities will take to protect domestic players is still an open question.

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