Regulator eases red tape for marine insurance in Shanghai free-trade zone

The mainland's insurance regulator is using the Shanghai free-trade zone as a testing ground for more flexibility in marine insurance, furthering a goal of cutting red tape.

The recent move of the China Insurance Regulatory Commission would streamline the supervision and operation of the marine insurance business in the trade zone, according to Chen Xingyu, a Shanghai-based analyst at Phillip Securities.

The regulator announced last month that insurance companies could apply for approvals for new marine insurance products from the Shanghai Institute of Marine Insurance, for the first time allowing insurers to file applications with an industry association rather than the regulator.

The institute was set up in December last year with 31 members, including insurance and shipping companies.

Other measures that apply to insurers in the free-trade zone include allowing marine insurance centres and reinsurance companies to set up branches in the zone without prior approval, which is also no longer required for the appointment of senior executives in branches in the zone.

"The move is a clear step to cutting red tape and delegating power, which is positive to the marine insurance business, as more flexibility is allowed," Chen said.