A visitor takes photos of the headquarters of China Banking and Insurance Regulatory Commission (CBIRC) in Beijing File photo: IC

China’s top insurance regulator announced on Friday that a 51 percent cap on foreign ownership in an insurance business has been scrapped, but new security reviews have been added. It is the latest push to further open up the domestic insurance market, which is slated to surpass the US to become the world’s largest this decade.

The China Banking and Insurance Regulatory Commission (CBIRC) said in a statement that a statute that bars foreign investors from taking a stake of over 51 percent in an insurance company has been deleted, as part of a major revision to the country’s regulations on foreign insurance companies operating in the domestic market.

The revised regulations also streamlined paperwork for foreign investors applying for business licenses in the Chinese market by scrapping requirements for a financial support statement.

The latest move is aimed at “further expanding the opening of the insurance sector,” the CBIRC said in the statement.

While market access has been expanded, the revised regulations also included a new requirement for national security reviews. A newly added clause stated that if investment “affects or could affect national security, a foreign investment security review should be conducted in accordance with the law.”

The revision is in line with China’s overall push to bolster national security in the face of looming risks, as recent key documents called for incorporating both development and security in all aspects of China’s policies.

The new opening measures would allow foreign investors to further tap into a rapidly growing insurance sector in China. Already the second-largest in the world, the Chinese insurance market is expected to surpass that of the US to become the world’s largest with premiums reaching $2.36 trillion in 2032, according to a report from Swiss Re Institute.