On May 21, the Bank of China Insurance Regulatory Commission issued a written decision on administrative punishment. The written decision on administrative penalty shows that Zhonghui has committed illegal acts such as submitting false materials to the regulatory authorities, and financial responsible persons have not obtained post qualifications but actually performed their duties, according to the investigation.

The above-mentioned act of providing false materials to the regulatory authorities violates the provisions of Article 86 of the Insurance Law. According to Article 170 of the Law, the mutual benefit was fined 500000 yuan; according to Article 171 of the Law, Li Jing was warned and fined 100000 yuan.

The above-mentioned financial person-in-charge does not obtain the post qualification but actually performs his duties, which violates the provisions of Article 13 of the trial measures for the Supervision of Mutual Insurance organizations (Insurance Supervision and Development (2015) No. 11) and Article 81 of the Insurance Law. According to Article 167 of the Insurance Law, Zhonghui was fined 40,000 yuan to each other; according to Article 171 of the Law, Yu Wei was warned and fined 20,000 yuan, and Yang Peidong was warned and fined 10,000 yuan.

　　附：Written decision on Administrative penalty of Bank of China Insurance Regulatory Commission

Banking and Insurance Supervisory penalty decision (2021) No. 10

Parties: Zhonghui property Mutual Insurance Co., Ltd. (hereinafter referred to as Zhonghui Mutual)

Residence: 4008 Menghai Avenue, Nanshan Street, Qianhai Shenzhen-Hong Kong Cooperation Zone, Shenzhen. Group C, Shenzhen-Hong Kong Innovation Center, 4F-01-4, Qianhai Shenzhen-Hong Kong Innovation Center.

Legal representative: Li Jing

Party: Li Jing

ID number: 32030219700823XXXX

Position: then chairman of Zhonghui Mutual

Address: Yuetan West Street, Xicheng District, Beijing

Client: Yu Wei

ID number: 11010119710215XXXX

Position: general manager of Zhonghui Mutual at that time

Address: Qilou Street, Dongcheng District, Beijing

Client: Yang Peidong

ID number: 12010719550605XXXX

Position: at that time, he was the director of Zhonghui Mutual Financial Investment Center, and actually performed the duties of the financial person in charge.

Address: Zhongguancun East Road, Haidian District, Beijing

In accordance with the relevant provisions of the Insurance Law of the people's Republic of China (hereinafter referred to as the Insurance Law) and the Administrative punishment Law of the people's Republic of China, I have investigated and tried the case of Zhonghui suspected of breaking the law, and informed the parties concerned of the facts, reasons, basis and rights enjoyed by the parties in accordance with the law. The parties Zhonghui and Li Jing and Yang Peidong put forward the statement and defense opinions, and I will review the statements and defense opinions. The case is now closed.

After investigation, Zhonghui committed the following illegal acts to each other:

First, submit false materials to the regulatory authorities

On September 29, 2016, Zhonghui Mutual (funding) submitted to the former China Insurance Regulatory Commission the request for the opening of Zhonghui Mutual Business (Zhonghui Mutual funding (2016) No. 15) and related materials, among which documents such as the loan commitment and the initial working capital loan source commitment show that the loan funds provided by the lender Shanghai Yuanyu Investment Management Co., Ltd. (hereinafter referred to as Shanghai Weiyu Investment Management Co., Ltd.) are all self-owned funds. It does not belong to borrowing funds from others or entrusting funds to others. After investigation, 82.64 million yuan of the initial working capital of 90 million yuan deposited by Shanghai Fengyu is a loan. It was not until February 2018 that Shanghai Fangyu paid off the loan in separate payments.

The opening instructions are signed by Li Jing, chairman of Zhonghui Mutual, who is also the legal representative of Shanghai Fengyu. Knowing the source of the initial operating capital of Shanghai Fengyu, Li Jing, as the chairman, signed and approved the opening instructions and submitted the relevant loan commitments, and was directly responsible for providing false materials to the regulatory authorities to apply for administrative license.

The above facts are proved by the opening instructions and commitments of capital sources, bank account statements and electronic responses, internal examination and approval documents, investigation records, factual confirmation, party feedback and relevant information submitted by Zhonghui to the regulatory authorities.

II. The person in charge of the finance department is not qualified to hold the post but actually performs his duties.

Yang Peidong, as the head of Zhonghui Mutual Finance, signed Zhonghui Mutual's start-up fee statement and Verification report for the period from October 1, 2015 to February 13, 2017 on June 22, 2017. Zhonghui Mutual Quarterly solvency report (fourth quarter of 2017) was signed on January 22, 2018. As of the inspection date, Yang Peidong has not obtained the qualification approved by the regulatory authority.

When Yang Peidong's qualifications were not approved, he signed the documents as the person in charge of finance; Yu Wei, the then general manager, was in charge of personnel work and allowed him to sign the documents as the person in charge of finance when it was known that Yang Peidong's qualifications had not been approved. Yang Peidong and Yu Wei are directly responsible for the above violations.

The above facts are proved by the relevant documents examined and approved by Yang Peidong as the person in charge of finance, investigation transcripts, factual confirmation, party feedback and relevant information notes, etc.

In view of the first illegal act mentioned above, Zhonghui and Li Jing made a plea to each other and asked for a lighter punishment. Zhonghui gave reasons to each other: first, Shanghai Yuyu had paid off the loan in the initial working capital in February 2018. Second, the relevant borrowing situation does not have a substantial impact and harm on the mutual development of Zhonghui and the rights and interests of members. Third, there is a difference between the creditor's rights of the initial working capital of the mutual insurance society and the equity of the joint-stock insurance company. In addition to the above reasons, Li Jing also pointed out that the reason for Shanghai Fengyu borrowing is that Zhonghui has special difficulties during the period of mutual preparation.

In view of the second illegal act mentioned above, Yang Peidong made a plea and asked for a remission of punishment on the grounds that: first, he had the ability to perform his duties. Second, in the process of performing their duties, Zhonghui has submitted an application for qualification approval to the regulatory authorities, which has been accepted by the regulatory authorities. Third, before Zhonghui selects the new financial person in charge of each other and completes the governance procedure, he continues to sign on his behalf, and there is no inappropriate situation in performing his duties.

With regard to the parties' defense of the first illegal act, I will review that: first, the nature of the initial working capital of the mutual insurance agency and the situation during the preparation period of the company, can not be used as a reason for the parties to submit false materials to the regulatory authorities. Second, Zhonghui Mutual and Li Jing provided false information to the regulatory authorities on the sources of initial working capital loans when submitting business opening instructions. The facts are clear, the evidence is sufficient, and the amount of money involved is relatively large. Third, in accordance with the Insurance Law, the Administrative license Law of the people's Republic of China and other laws and regulations to determine the range of administrative penalties and other administrative measures that can be taken against Zhonghui and Li Jing, a comprehensive consideration has been given to the facts, nature and circumstances of its illegal acts, as well as the degree of social harm.

With regard to the parties' defense of the second illegal act, I will review that: first, whether they have the ability to perform their duties or not can not be used as a reason for the parties to perform their duties without approved qualifications. Second, under the circumstances that Yang Peidong's qualifications have not been approved by the regulatory authorities, Yang Peidong took up his duties as the head of finance, and continued to sign documents in the name of the person in charge of finance after Zhonghui Mutual confirmed in November 2017 that he would replace the proposed candidate. The facts are clear and the evidence is sufficient. Third, the scope of administrative penalty for Yang Peidong has comprehensively considered the facts, nature, circumstances and the degree of social harm of his behavior, and the scale of punishment is appropriate.

To sum up, I will decide to impose the following administrative penalties:

The above-mentioned act of providing false materials to the regulatory authorities violates the provisions of Article 86 of the Insurance Law. According to Article 170 of the Law, the mutual benefit was fined 500000 yuan; according to Article 171 of the Law, Li Jing was warned and fined 100000 yuan.

The above-mentioned financial person-in-charge does not obtain the post qualification but actually performs his duties, which violates the provisions of Article 13 of the trial measures for the Supervision of Mutual Insurance organizations (Insurance Supervision and Development (2015) No. 11) and Article 81 of the Insurance Law. According to Article 167 of the Insurance Law, Zhonghui was fined 40,000 yuan to each other; according to Article 171 of the Law, Yu Wei was warned and fined 20,000 yuan, and Yang Peidong was warned and fined 10,000 yuan.

The party concerned shall, within 15 days from the date of receiving this penalty decision, hold the payment code to the agent bank designated by the Ministry of Finance to make payment. Upon expiration of the time limit, an additional fine of 3% of the fine amount will be imposed each day.

If the party concerned refuses to accept this administrative penalty decision, he may, within 60 days from the date of receipt of this penalty decision, apply to the Bank of China Insurance Regulatory Commission for administrative reconsideration, it may also bring a suit in a people's court with jurisdiction within six months from the date of receipt of this penalty decision. The implementation of this decision shall not be suspended during the period of reconsideration and litigation.

May 11, 2021