On June 15th, the Shanghai Head Office of the People’s Bank of China announced that the first transactions under the new policy for convenient settlement have been successfully implemented by two insurance companies. This move has significantly boosted the development of the Shanghai Reinsurance Center.
Since the launch of the pilot program for high-level opening up of cross-border trade, 39 pilot banks in Shanghai have provided facilitation settlement services for over 840 high-quality enterprises. They have processed more than 430,000 transactions, with a total value exceeding 240 billion US dollars.
Recently, the Shanghai Branch of the State Administration of Foreign Exchange (SAFE) guided the Shanghai Branch of Bank of China to successfully handle cross-border premium payment transactions for COSCO Shipping Property & Casualty Insurance Co., Ltd., and the Shanghai Branch of China Export & Credit Insurance Corporation. This marks the expansion of the pilot program to include insurance institutions, further enhancing the convenience of cross-border settlements for these companies.
Under the traditional settlement model, insurance institutions had to prepare numerous documents such as contracts and invoices when handling cross-border foreign exchange transactions.
This process was cumbersome and inefficient. By closely monitoring new developments and demands in the insurance market and identifying key pain points, the Shanghai Branch of SAFE has promoted a “simplification of procedures and reduction of documents” for cross-border settlements. It has also guided banks to conduct due diligence and assisted enterprises in obtaining qualifications for the pilot program.
Transactions that previously took 3 to 5 working days can now be completed within minutes, achieving “instant application and minute processing.” Each transaction saves over 95% of the time, significantly improving capital turnover efficiency and earning high praise from insurance companies.
Currently, there are 146 insurance operating institutions and their branches in Shanghai qualified to conduct foreign exchange insurance business. Moving forward, the Shanghai Branch of SAFE will adhere to the principle of steady progress, continuously improve the quality and efficiency of the pilot program, explore the potential of precise policy support, attract global insurance institutions to Shanghai, and enhance the role of foreign exchange management in serving insurance institutions. This will provide stronger momentum for the construction of Shanghai as an international reinsurance center.
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