Insurance companies are permitted to invest in start-up companies that satisfy the following conditions:

1. The start-up is duly set up and registered and has legal person status.
2. The business activities of the start-up are compliant with the industry policies of the Chinese government, and the start-up possesses the requisite qualifications to conduct the relevant business activities.
3. The shareholders and the senior management of the start-up have good standing and sound creditworthiness records.
4. The start-up is at the growth or maturity stage or within strategically new industry(ies), or has a clear IPO plan and relatively high acquisition value.
5. The start-up has market, technology, resource or competitive advantage and potential room of value increase, and has a specific profit distribution mechanism.
6. The management team of the start-up possesses professional knowledge, industry experience and management capabilities that are compatible with their job responsibilities.
7. The start-up is not involved in a major legal dispute and has complete and clean ownership over assets, and there is no legal defect in its shareholding or asset ownership.
8. There is no affiliation between the insurance company, the investment institution and professional advisor involved in the investment, unless otherwise permitted by the regulator and advance reporting/disclosure has been complied with.
9. Other prudential conditions required by the China Banking and Insurance Regulatory Commission (CBIRC).

Conditions (2), (4), (5) and (8) are not applicable if investment in the start-up is also a regulated entity in insurance industry. Start-up companies in which insurance companies are permitted to make direct equity investment must be: (i) regulated entities in the insurance industry; (ii) financial institutions in non-insurance sectors; (iii) entities whose businesses are relevant to the insurance business, such as pension, medical care, auto servicing; and (iv) energy enterprises, resource enterprises, and modern agricultural enterprises and new-type trading circulation enterprises that are relevant to insurance business, and such enterprises are compliant with the macro policies and industry policies of the Chinese government and have stable cash flows as well as good economic performances.

Start-ups in which insurance companies are investors should be in any of the following circumstances:

• Its business is not in line with the industry policies of the Chinese government.
• There is no expectation of stable cash return through the investment in the start-up or value increase in the start-up.
• The start-up has high pollution or high energy consumption, fails to comply with the energy saving or environmental protection requirements, or has low technology value-add.

Insurance companies are permitted to indirectly make equity investments in an insurtech start-up via equity investment funds. However, it is not entirely clear for the time being whether an insurtech start-up falls within the scope of entities in which insurance companies can make direct equity investments. While it is not explicitly prohibited by published rules of CBIRC, insurance companies generally are not able to provide loans to companies in which they make equity investments.

Aside from the restrictions mentioned above, an insurance company shall ensure the following:

• The value of its equity investment in one entity shall not exceed 30% of its net asset value.
• The total value of its equity investment shall not exceed its net asset value.
• The total value of the equity investments it has made via direct equity investment and via equity investment funds does not exceed 10% of its total asset as of the most recent calendar quarter.

It is not entirely clear if insurance are permitted to make equity investment in offshore insurtech start-ups.

Equity investment in offshore entities are included in the scope of an insurance company's overseas investment, the value of which must comply with the total asset percentage imposed by CBIRC.

Generally speaking, it is not permissible for insurance companies to grant loans to its invested companies.

Equity investment in another entity must be approved by the shareholders' meeting or the board of directors of an insurance company, depending on the relevant requirements in its articles of association and/or its relevant rules of equity investment.

Generally speaking, no.

There are no restrictions on insurance companies in respect of appointing its own staff or management to join the board of directors or management team of its invested companies. On the contrary, CBIRC expects insurance companies making equity investment in other companies to have the ability to appoint its own staff or management to the invested companies' board of directors or management team.

Service contracts concluded by an insurance company with its invested company whereby services are provided to the insurance company would be considered connected party transactions of the insurance company.

Depending on the absolute contract value and the percentage of the contract value to the net asset value of the insurance company as of the end of last financial year, a connected party transaction can be categorized as: (a) a major connected party transaction, which shall be subject to review by the affiliated party transaction control committee or the audit committee before being submitted to the board of directors or the shareholders' meeting of the insurance company, depending on the insurance company's articles of association and/or its relevant rules for connected party transactions and then be reported to CBIRC for recordal; or (b) a common connected party transaction, which shall be subject to examination and approval according to the internal procedures of an insurance company before being ultimately submitted to the affiliated party transaction control committee or the audit committee for record-filing or approval, which needs to be reviewed and approved in accordance with the insurance company's internal authorization process.

As mentioned, a major connected party transaction must be reported to CBIRC for recordal within 15 days of occurrence (approval) of such transaction.

There are no restrictions on insurance companies providing operational support to their invested companies. If the provision of operational support by an insurance company would not result in transfer of economic interest from the insurance company to its invested company, such transaction may not be considered a connected party transaction that is subject to the regulations of connected party transactions.

There is currently no restriction on the form of remuneration for an insurance company to offer to its invested companies.

Intellectual property rights of companies invested by insurance companies can be transferred, either through a transfer and assignment agreement or by way of exclusive license.

There are none, as long as the insurtech start-up complies with the general data privacy laws and regulations as well as the general data privacy rules contained in the Cybersecurity Law.