China Banking and Insurance Regulatory Commission has made amendments to the Independent Director Management Measures of Insurance Institutions, concerning the nomination and removal mechanism, Yicai.com reported.
According to the amendment, major shareholders of an insurance company can no longer nominate independent directors.
The new rule also refines the number and proportion of independent directors, requiring insurance companies to set up at least three independent directors in the board of directors, and not less than one-third of the total number of board members.
For insurance institutions with controlling shareholders who hold more than 50% of the stakes, the proportion of independent directors should be more than a half.
The proportion can be relaxed to 1/3 as long as the company’s corporate governance evaluation remains to be “excellent” for two consecutive years.
An official who is an independent director of several insurance companies said the increase in the minimum number of independent directors would help the latter to perform their duties. “Two people are still too weak,” the official said.