China Banking and Insurance Regulatory Commission: Insurance institutions conducting financial product investments should reasonably set the allocation ratio of financial product investments.

The General Office of the China Banking and Insurance Regulatory Commission issued the "Guidelines for the Application of Internal Control of Insurance Funds (Nos. 4-6)", which mentioned that insurance institutions should, when engaging in financial product investments, reasonably set the allocation ratio of financial product investments based on regulatory requirements, investment needs, liability characteristics, solvency, risk preferences, investment management capabilities, risk management capabilities, etc., and perform the corresponding internal approval procedures. For financial products that do not meet the exemption penetration conditions of solvency supervision rules, insurance institutions should identify the underlying assets of financial products based on the penetration principle and grasp the risk-return characteristics of financial products. The above-mentioned "Guidelines" also mentioned that insurance companies should, when engaging in equity investments, comply with relevant laws, regulations, and regulatory requirements, establish a related transaction control mechanism covering underlying assets, carry out related transaction approval, information disclosure, reporting responsibilities, etc., to prevent shareholders, actual controllers, directors, supervisors, senior management, etc. from exploiting related transactions to harm the interests of the company. Insurance companies must not use direct or indirect equity investments as a means to circumvent regulatory requirements and provide financing to related parties or designated parties in violation of regulations.Article 13 Insurance companies conducting direct equity investments shall have the investment execution department or position make preliminary judgments on the investment value and compliance of reserve projects based on the basic information of the projects, and form a project proposal for the reserve projects to be promoted. Article 14 Insurance companies should establish a project approval mechanism. Projects with investment value identified after screening should be submitted by the investment execution department or position according to the procedures for approval by the investment decision-making body or its authorized body or personnel. Section IV Due Diligence and Business Negotiation Article 15 Insurance companies engaging in direct equity investments should hire third-party professional institutions to provide due diligence and other professional services in accordance with regulatory requirements. Insurance companies should establish selection and appointment systems, clarify requirements and standards for appointment, and comply with their relevant internal control regulations. The qualifications of professional institutions should meet regulatory requirements. For indirect equity investments, insurance companies should evaluate the investment management capabilities of equity investment management institutions (referred to as investment institutions) and their investment funds according to regulatory requirements. Insurance companies should require investment institutions to ensure the safety and independence of raised funds, cooperate with due diligence, and provide written documents such as product offering documents, relevant justification reports, or due diligence reports. Article 16 Insurance companies conducting equity investments should conduct due diligence on the investment targets, with participation from legal, compliance, and risk management departments or positions, and share due diligence reports and other information among departments or positions involved in investment execution, legal, compliance, risk management, and post-investment management. Article 17 Insurance companies should negotiate commercial terms in accordance with market principles based on due diligence findings, negotiating transaction prices, structures, and other core investment terms. Important commercial terms negotiations should involve investment and legal professionals. For major equity investments, special attention should be given to the proportion of appointed directors, supervisors, executives, or key positions with the company, exercising voting rights or participating in the business decisions of the invested company to enhance shareholder influence, strengthen proactive risk control, ensure majority control or control over the invested company, and maintain the effectiveness of investment decisions and business management. Article 18 The results of business negotiations should be confirmed in writing and implemented in investment agreements or other legal documents. For indirect equity investments, insurance companies should sign investment contracts or agreements with investment institutions stating the rights and obligations of the parties, management fees, performance incentives, key personnel changes, replacement of investment institutions, handling of conflicts of interest, risk prevention, information disclosure, handling of exceptional situations, asset exit arrangements, and liability enforcement. Insurance companies should ensure through legal documents that investment funds are independent of inherent assets of investment institutions, trustees, and other related entities. Section V Investment Decision Article 19 Insurance companies undertaking equity investments should establish an investment decision-making system that meets corporate governance requirements, clearly defining the responsibilities of different levels, departments, and relevant positions, and strictly following internal investment decision-making processes and authorization systems. Article 20 Insurance companies conducting equity investments should establish investment decision documents as a basis for decision-making. The contents of investment decision documents should include feasibility studies, due diligence, investment agreement texts or key terms, compliance opinions, legal opinions, explanations of related party transactions (if any), documents issued by relevant professional institutions (if any), post-investment management plans, and other relevant information. Article 21 Insurance companies conducting equity investments should make decision on each project based on prudence. The investment decision-making body should have professionalism and independence, and decisions should be recorded through audio, video, or written records to form written resolutions. Article 22 Insurance companies should establish and improve investment decision-making protection mechanisms, including document management, avoidance mechanisms, project team responsibility systems, tracking and supervision of decision execution, and liability enforcement. Article 23 After approval of equity projects, insurance companies should follow the conditions approved by the investment decision-making body. In the event of significant changes during the investment execution process, the investment execution department or position should make a clear judgment on whether the changes have a substantial impact on the investment plan, and if so, submit opinions to the investment decision-making body for approval in a timely manner. Section VI Agreement Signing and Transaction Execution Article 24 Insurance companies should define the process for signing equity investment-related agreements. The investment execution department or position should verify transaction documents to ensure that core elements of the proposed transaction align with the investment decision requirements; legal, compliance, and other departments should review agreement terms to ensure compliance with investment resolutions and relevant regulatory requirements. Before signing agreements, insurance companies should compare the actual signed agreement with the approved agreement text to ensure consistency. Insurance companies should standardize the agreement stamping process, strictly manage seal usage to avoid operational risks in the agreement signing process. Insurance companies should not enter into any form of "drawer agreements" to circumvent internal controls and regulatory requirements, including but not limited to engaging in equity-like debt activities or using invested companies as channels for securities investments. Article 25 Insurance companies should clearly define internal approval processes for monitoring and reporting on investment projects. Agreements should be signed in accordance with regulatory approval or reporting procedures. Insurance companies should specify in the agreements that parties involved, such as the invested company, the issuer or manager of investment funds, have an obligation to provide relevant reports and materials, identify and report related transactions, and cooperate with regulatory requirements. Article 26 Insurance companies should clarify the process for fund transfer and settlement, prudently pay investment funds in accordance with agreements, obtain ownership or legal documentation in a timely manner, and complete asset delivery. Fund transfers should be applied for by the investment execution department or position, and core elements such as transfer conditions, amounts, and accounts should be reviewed by the investment operations department or position to ensure that fund transfers align with investment resolutions, compliance with internal controls, and regulatory requirements.The investment agreement is agreed upon.Article 27 Insurance companies shall custody equity investments and supervise custodians to strictly fulfill their custodial responsibilities in accordance with laws, regulations, and contract agreements. Section 7 Post-Investment Management Article 28 Insurance companies engaging in equity investment shall strengthen post-investment management of investment projects during the investment period, establish a full-process management system led by asset appreciation and risk control. Article 29 Insurance companies shall designate a specific department or position for post-investment management, appoint a dedicated individual to manage each investment project. The post-investment management department or position shall regularly prepare post-investment management reports on equity investments. The investment decision-making body or its authorized body shall regularly review the post-investment management reports to comprehensively understand the operational status, risk management, and major issues of the investment projects. Article 30 The post-investment management department or position shall be responsible for collecting information on invested enterprises and investment funds, managing investment projects in accordance with post-investment management plans. Adjustments to major investment matters shall require approval from the investment decision-making body. Key points of post-investment management for direct equity investments include: (1) Continuously monitor or participate in the operational management decisions of invested enterprises. Communicate with the management team, review financial and operational performance of the enterprise, request regular reports on operational management, understand operational processes and major decisions, and if necessary, hire professional organizations to conduct financial audits or due diligence on invested enterprises; (2) Track post-investment performance and monitor post-investment risks of projects, classify asset risks of investment projects according to regulatory requirements, reveal the actual value and risk level of insurance assets, and adequately make provisions for asset impairment in a timely manner; (3) Monitor and analyze macroeconomic conditions, industry development, and other factors affecting the operation and valuation of investment projects; (4) Pay attention to fund inflows, capital recoveries, dividends, and other financial transactions. Fund transactions should follow the management principle of single coordination and multi-layer review, strictly control the risk of fund transfers, and ensure the accuracy and timeliness of fund transactions; (5) Monitor changes in equity ownership, equity disposal, asset restructuring, debt restructuring, mergers and acquisitions, major asset sales, significant guarantees, major investment and financing, borrowing, key personnel, credit status, compliance, and other significant changes of invested enterprises; (6) Other matters that affect the safety of insurance fund investment. In addition to meeting the requirements of the preceding paragraph, key points of post-investment management for significant equity investments also include: (1) Monitor the performance of appointed or delegated directors, supervisors, operational management, or key positions at various corporate governance levels, review and vote on significant corporate decisions in shareholder meetings, board meetings, etc., exercise shareholder rights, and fulfill shareholder obligations; (2) Monitor the synergy effects of enterprises; (3) Monitor the implementation of measures to improve corporate governance, integrate resources, restructure assets and debts, conduct mergers and acquisitions, optimize equity, promote listing, and other comprehensive measures to enhance corporate value. When insurance companies engage in indirect equity investments, they should track and evaluate the performance of investment institutions, require investment institutions to take effective measures to enhance enterprise value, and achieve the goal of maximizing returns. Article 31 Insurance companies should regularly evaluate the quality of equity assets and risk conditions, adjust equity investment strategies in a timely manner, and prevent related risks. Article 32 Insurance companies shall conduct post-investment valuations and stress tests in accordance with regulatory requirements. Post-investment valuations shall follow the principles of independence and professionalism, and be objective and fair. The valuation and stress test results shall be submitted to the investment decision-making body or its authorized body after verification. Article 33 When insurance companies engage in indirect equity investments, investment institutions should timely, accurately, truthfully, and completely disclose relevant information about their investment institutions, investment funds, and underlying assets in accordance with regulatory requirements and contract agreements. Article 34 Insurance companies should establish a decision-making mechanism and related processes for exiting equity projects, and retain written documents for project exit decisions and implementation. For significant equity investments in equity transfers or exits, reports must be submitted to regulatory authorities with explanations of the reasons and plans for such transfers or exits, along with relevant resolutions of shareholder meetings or board meetings. Article 35 Insurance companies engaging in equity investments should establish emergency response mechanisms for significant unforeseen events. The emergency response mechanism should include risk scenarios, emergency plans, work objectives, reporting routes, operating procedures, and response measures. In the event of major investment risks, insurance companies should activate the emergency response mechanism, make provisions for impairment in accordance with the prudence principle, and truthfully reflect the value of assets. Article 36 Insurance companies should submit reports, statements, documents, and materials to regulatory authorities in a timely, accurate, and complete manner in accordance with regulatory requirements. Article 37 Insurance companies should establish relevant systems for the unified and standardized management of investment records, including equity investments. Insurance companies should specify management regulations and the responsibilities and authorities of relevant personnel at various stages of obtaining, archiving, storing, and accessing relevant documents and investment records. Investment records include paper documents, electronic documents, audio, video materials related to projects, and others. Section 8 Supplementary Provisions Article 38 When insurance companies entrust insurance asset management institutions to carry out indirect equity investments, the insurance asset management institutions shall comply with the relevant requirements of this guideline. Internal Control Guidelines for the Utilization of Insurance Funds No. 5 - Real Estate Investment Section 1 General Provisions Article 1 In order to promote the standardized development of insurance fund utilization, effectively prevent and resolve risks, and safeguard the safety of insurance funds, this guideline is formulated based on the "Administrative Measures for the Utilization of Insurance Funds," "Internal Control Guidelines for the Utilization of Insurance Funds," and related regulations. Article 2 Real estate investment, as referred to in this guideline, includes investment properties held in the form of ownership or equity in project companies, as well as real estate financial products primarily invested in such assets. Article 3 Insurance groups (holding) companies and insurance companies (referred to as insurance companies) engaging in real estate investment must meet the qualification requirements specified by the China Insurance Regulatory Commission and have the required management capabilities for real estate investments. Article 4 Insurance companies engaging in real estate investments should at least focus on risks such as asset-liability mismatch, market risk, liquidity risk, legal compliance risk, and operational risk. Article 5 Insurance companies engaging in real estate investments should comply with relevant laws, regulations, and regulatory requirements, establish a control mechanism for related transactions covering underlying assets, and fulfill related transaction control requirements.Approval and disclosure responsibilities for related party transactions, reports, etc., are implemented to prevent shareholders, actual controlling persons, directors, supervisors, senior management, etc., from using related party transactions to harm the interests of the company.Article 6 Insurance companies engaging in real estate investment must establish a decision-making and authorization system with clear division of labor, rigorous and efficient business operation processes, sound risk management systems, risk warning and disposal systems, as well as accountability systems, fully leveraging the role of the three lines of defense. Relevant functional departments should closely cooperate and independently provide opinions. Article 7 Insurance companies engaging in real estate investment must reasonably set the allocation ratio of real estate investment based on regulatory requirements, investment needs, liability characteristics, solvency, risk preferences, asset-liability management, investment management capabilities, and risk management capabilities. They must also follow the corresponding internal approval procedures. Section 2 Responsibilities and Authorization Approval Article 8 Insurance companies engaging in real estate investment must establish relevant departments or positions, clarify the responsibilities and authorities of relevant departments or positions, and ensure that departments or positions involved in real estate investment are separated, controlled, and supervised. Departments or positions incompatible with real estate investment should at least include: (1) Investment decision-making and execution; (2) Investment decision-making, execution, and legal, compliance, risk management; (3) Investment decision-making, execution, and investment operations. Insurance groups (holdings) and their insurance subsidiaries share internal resources, and consulting services and technical support should be provided by insurance asset management institutions within the group that meet regulatory requirements. The responsibilities of both parties should be clearly defined, and insurance companies should not directly or indirectly relinquish decision-making functions and rights in key aspects such as investment decision-making, execution, operations, legal compliance, and risk management. Based on this, both parties can sign agreements specifying the specific content of consulting services and technical support. Article 9 Insurance companies engaging in real estate investment must reasonably set up relevant positions for real estate investment and be equipped with professional personnel with relevant experience in real estate investment that meet regulatory requirements. Article 10 Insurance companies engaging in real estate investment must establish a sound decision-making procedure and authorization mechanism for real estate investment that is relatively centralized, tiered, and unified in terms of rights and responsibilities. They should also determine the decision-making powers and approval powers of the shareholders' meeting, board of directors, and operational management. Article 11 Insurance companies engaging in real estate investment must establish operating processes or detailed rules covering project selection, project approval, due diligence, business negotiations, investment decision-making, agreement signing, transaction execution, post-investment management, among other business processes. Responsibilities, requirements, connection methods, and operational standards of each process and related positions should be clearly defined. Insurance companies should regularly check and evaluate the implementation of relevant real estate investment systems. Section 3 Project Screening and Approval Article 12 Insurance companies investing in real estate in the form of property rights or equity of project companies must establish a project screening and reserve mechanism, establish a project reserve pool according to asset allocation plans, and specify project screening principles and entry standards. Article 13 Insurance companies investing in real estate in the form of property rights or equity of project companies should collect basic information including project location, usage type, building or land conditions, investment scale, etc., for preliminary screening of the proposed real estate projects based on project basic information, investment value analysis materials, investment models, compliance, etc. Article 14 Insurance companies must establish a project approval mechanism. Projects with investment value after screening should be submitted by the investment execution department or position to the investment decision-making body or its authorized body or personnel for project approval. Article 15 Insurance companies should dynamically manage the project reserve pool according to the project approval situation, updating project information and status in a timely manner. Section 4 Due Diligence and Business Negotiation Article 16 Insurance companies engaging in real estate investment should hire third-party professional institutions to provide due diligence and other professional services in accordance with regulatory requirements. Insurance companies should establish a selection system and supporting processes, clarify selection requirements and standards, and comply with relevant internal control regulations. The qualifications of professional institutions should meet regulatory requirements. When investing in real estate financial products, insurance companies should require real estate investment management institutions (referred to as investment institutions) to ensure the safety and independence of raised funds, cooperate with insurance companies in due diligence, and provide written documents such as product prospectus, related justification reports, or due diligence reports. Article 17 Insurance companies engaging in real estate investment should conduct due diligence on investment targets by the investment execution department or position, with participation from legal, compliance, and risk management departments or positions. Due diligence reports and other due diligence information should be shared among the investment execution, legal, compliance, risk management, and post-investment management departments or positions. Article 18 In conducting due diligence for real estate investment, insurance companies should pay attention to the following elements: (1) Ownership status, location, management rights, and land use term of the proposed real estate project; (2) For investment in real estate through property rights, the focus should be on the ownership status and restrictions on the property rights of the target investment; (3) For investment in real estate through equity of project companies, the focus should be on the ownership of the project company, assets, liabilities, business scope, real estate use, legal proceedings, etc.; (4) For investment in real estate financial products, the focus should be on the investment management capabilities of the investment institution, legality and compliance of the products, reliability and adequacy of underlying assets, feasibility of investment strategies and proposals, etc.; (5) Other factors affecting transaction security and safety of insurance funds. Article 19 Based on the findings of due diligence, insurance companies should negotiate with counterparts based on market principles to determine core investment terms such as transaction price and structure, optimizing the risk-return characteristics of the project. Negotiations on important commercial terms should involve participation from investment and legal professionals. Article 20 The results of business negotiations should be confirmed in writing and implemented in investment agreements or other legal documents. For real estate with limited entitlement procedures, written contracts should be used to stipulate conditions for the removal of restrictions, operational procedures, payment methods for contract consideration, etc., to prevent and control transaction risks. When investing in real estate financial products, insurance companies should sign investment contracts or agreements with investment institutions, detailing obligations, responsibilities, rights, etc.The rights and obligations of the parties, management fees, performance compensation, changes in key personnel of the management team, replacement of investment institutions, handling of conflicts of interest, risk prevention, information disclosure, handling of exceptional situations, asset exit arrangements, and accountability, etc. Insurance companies must ensure that investments in real estate financial products are independent of the inherent property of investment institutions, custodian institutions, and other related institutions through legal documents and other means.Fifth Section Investment Decision Article 21 Insurance companies engaged in real estate investment must establish an investment decision-making system that meets corporate governance requirements, clarify the responsibilities of various levels, links, departments, and relevant positions, and strictly follow the internal investment decision-making process and authorization system for implementation. Article 22 Insurance companies engaged in real estate investment must form investment decision-making documents to provide a basis for decision-making. The contents of investment decision-making documents include feasibility studies, asset allocation plans, solvency analysis, asset evaluation, risk assessment, investment agreement texts or key terms, compliance opinions, legal opinions, related party disclosures (if any), documents issued by relevant professional institutions (if any), and follow-up management plans, as well as other content that can provide a basis for investment decision-making. Article 23 Insurance companies engaged in real estate investment decisions must make decisions on a case-by-case basis or on each individual project following the principle of prudence. The investment decision-making body must fully understand the basic situation of the real estate project, major risks, investment plans, profit forecasts and scenario analysis, post-investment management, fund arrangements, and other important matters. The investment decision-making body must have professionalism and independence, record the investment decision-making meeting process through recording, video recording, or written records to leave a trace, and the investment decision-making results must be documented in written resolutions. Article 24 Insurance companies must establish and improve investment decision-making safeguard mechanisms, such as document management, avoidance mechanisms, project team responsibility systems, decision implementation tracking supervision, and accountability. Article 25 After the real estate project is approved, insurance companies must implement according to the conditions approved by the investment decision-making body. In the event of significant changes during the investment execution process, the investment execution department or position must make a judgment on whether the significant change will have a substantial impact on the investment plan. If a substantial impact is determined, the handling opinions must be promptly reported to the investment decision-making body for approval. Sixth Section Agreement Signing and Transaction Execution Article 26 Insurance companies must clarify the process for signing real estate investment-related agreements. The investment execution department or position must verify the transaction documents, confirm that the core elements of the proposed transaction document comply with the investment decision-making requirements, and legal, compliance, and other departments or positions review the agreement clauses to ensure they comply with the investment resolution and relevant regulatory requirements. Before signing the agreement, insurance companies must verify the actual original agreement to ensure consistency with the approved agreement text. Insurance companies must regulate the agreement signing process, strictly manage the use of seals, and avoid operational risks in the agreement signing process. Article 27 Insurance companies must establish internal audit procedures such as project monitoring reports. Insurance companies must stipulate in relevant agreements that project companies, real estate financial product issuers or managers, and other parties have an obligation to provide relevant reports, identify and report related party transactions, and cooperate with regulatory supervision. Article 28 Insurance companies must clarify the fund allocation and delivery process, conscientiously pay the investment funds agreed upon in the agreements according to the process, timely handle project delivery, release of mortgages, property rights transfer, title registration, and project company business registration changes, and complete asset delivery. The transfer of investment funds must be applied for by the investment execution department or position and undergo a review of core elements such as fund transfer conditions, amounts, and accounts by the investment operation department or position to ensure consistency with the investment decision, investment agreement terms. Article 29 Insurance companies must entrust real estate investments to trustees and urge them to strictly perform their custodial responsibilities according to laws, regulations, and contractual agreements. Seventh Section Post-Investment Management Article 30 Insurance companies engaged in real estate investment must strengthen post-investment management based on regulatory requirements, establish a post-investment management system and process guided by risk control. For real estate investments made through equity investment in project companies, insurance companies must establish a delegated personnel management system that includes qualifications, management assessments, and accountability. Article 31 Insurance companies must designate a post-investment management department or position to manage each investment project. The post-investment management department or position must regularly prepare post-investment reports for real estate investments. The investment decision-making body or its authorized body must periodically review the post-investment reports to fully understand the post-operation, risk management, and major issues of the investment project. Article 32 Insurance companies making real estate investments through equity investment in project companies must strictly regulate the project company's name, limit its business scope, and prohibit the project company from making equity investments. Insurance companies must urge project companies in which they have invested to establish a standard legal governance structure and operational mechanism. Insurance companies must appoint directors, senior management personnel, and key positions to project companies according to regulatory requirements and provide opinions on major matters such as equity transfers, asset sales, guarantees, mortgages, and fund financing to protect their legal rights and interests. Article 33 Insurance companies must manage projects according to regulatory requirements and investment agreements, monitor real estate market conditions, continuously monitor the operation and investment returns of the real estate projects, evaluate investment risks regularly, and maintain asset security. Post-investment management of real estate investments includes: (1) Ownership status of the project, project construction, operation, and financial situations; (2) Significant changes in project company and its shareholders' equity, senior management personnel, significant asset changes, major violations or legal disputes; (3) Performance and diligence of project companies and trustees; (4) Information disclosure of the project; (5) Progress of project development, subsequent financing, use of investment funds, project valuation, asset risk classification, and provision for asset impairment; (6) Effectiveness and changes in collateral and credit enhancement measures; (7) Transfer and registration of relevant rights at different stages of project development; (8) Risk disposal of the project, including project extensions, litigation, and recovery, etc.; (9) Other issues that may affect the safety of insurance fund investments. In addition to the above, the post-investment management of controlling project companies must also meet the following requirements: (1) Performance of appointed or delegated directors, senior management personnel, and key positions; (2) Management of seals, licenses, bank accounts, online banking of project companies.Management of important seals such as U-Shield.(3) Project company engineering budgeting, settlement, and payment management. Insurance companies investing in real estate financial products should require investment institutions to strictly fulfill their responsibilities in accordance with the investment contract or prospectus of the fund, effectively prevent risks, and protect the rights and interests of investors. Article 34 Insurance companies should regularly evaluate the quality and risk status of real estate assets, adjust the real estate investment strategy and format combination in a timely manner, and prevent related risks. Article 35 Insurance companies should conduct post-investment valuation and stress testing in accordance with regulatory requirements. Post-investment valuation follows the principles of independence and professionalism and must be objective and fair. The valuation and stress testing results should be submitted to the investment decision-making body or its authorized body after review. Article 36 If an insurance company converts self-use real estate into investment real estate, the insurance company must fully demonstrate the reasonableness and necessity of the conversion, ensure that the conversion value is fair, and not use the asset conversion for improper profit transfer or harm the interests of the insurance company. Article 37 Insurance companies investing in real estate financial products should require investment institutions to disclose relevant information of the real estate financial products in a timely, accurate, truthful, and complete manner in accordance with regulatory requirements and contract provisions, including but not limited to investment scale, operation management, asset valuation, asset quality, investment returns, trading transfers, and risk levels. Article 38 Insurance companies should establish decision-making mechanisms and related processes for the exit of real estate investment projects, continue to track real estate industry policies, conduct project visits and inspections, project company governance management, investment contract management, etc., regularly monitor the operation and financial status of investment projects, analyze and identify the timing of project exits, and promote project exits in a timely manner in accordance with the exit decision-making mechanism and related processes. Insurance companies should retain written documentation of project exit decisions and execution. Article 39 Insurance companies engaged in real estate investment should establish an emergency response mechanism for major unforeseen events. The emergency response mechanism includes risk situations, emergency plans, work objectives, reporting paths, operating procedures, disposal measures, etc. In the event of major investment risks, insurance companies should activate the emergency response mechanism, make impairment provisions in accordance with the principle of prudence, and truly reflect the value of assets. Article 40 Insurance companies should submit reports, statements, documents, and information to regulatory authorities in accordance with regulatory requirements to ensure timeliness, accuracy, and completeness. Article 41 Insurance companies should establish relevant systems to uniformly manage investment files, including real estate investments. Insurance companies should clarify the management regulations and responsibilities and authorities of relevant personnel for obtaining, archiving, storing, and accessing relevant documents and investment files. Investment files include paper documents, electronic documents, audio, video materials, etc., related to the project. Section VIII Miscellaneous Provisions Article 42 Insurance companies entrusting insurance asset management institutions to invest in real estate financial products should comply with the relevant requirements of this guidance. Internal Control Guidelines for the Use of Insurance Funds No. 6 - Financial Products Section I General Principles Article 1 To promote the standardized development of the use of insurance funds, effectively prevent and resolve risks, and protect insurance fund safety, this guidance is formulated based on the "Measures for the Administration of the Use of Insurance Funds," "Guidelines for Internal Control of the Use of Insurance Funds," and relevant provisions. Article 2 The financial products referred to in this guidance include debt investment plans, equity investment plans, collective fund trusts, debt-to-equity investment plans, financial products mainly invested in non-standardized assets such as wealth management products and insurance asset management products, as well as asset support plans, non-standard financial products recognized by the China Banking and Insurance Regulatory Commission, such as asset support special plans not listed on stock exchanges. Article 3 Insurance groups (holding) companies, insurance companies, and insurance asset management institutions (referred to as insurance institutions) engaging in financial product investment must meet the qualification requirements stipulated by the China Banking and Insurance Regulatory Commission and have the corresponding investment management capabilities. Article 4 When insurance institutions engage in financial product investments, they should pay attention to credit risk, market risk, liquidity risk, legal compliance risk, and operational risk. Article 5 When insurance institutions engage in financial product investments, they should follow relevant laws and regulations and regulatory requirements, establish a related party transaction control mechanism covering underlying assets, fulfill the duties of related party transaction approval, information disclosure, reporting, etc., to prevent shareholders, actual controllers, directors, supervisors, senior management, and other stakeholders from using related party transactions to harm the company's interests. Insurance institutions are not allowed to use financial products as channels to circumvent regulatory requirements and provide financing to related parties in violation of regulations. Article 6 When insurance institutions engage in financial product investments, they should establish a well-defined decision-making and authorization system, rigorous and efficient business operation processes, sound risk management systems, risk warning and disposal systems, and accountability systems to fully utilize the three lines of defense and ensure close coordination between relevant functional departments, providing independent opinions. Article 7 When insurance institutions engage in financial product investments, they should reasonably set the allocation ratio of financial product investments based on regulatory requirements, investment needs, liability characteristics, solvency, risk preferences, investment management capabilities, and risk management capabilities, and perform corresponding internal approval procedures. Article 8 For financial products that do not meet the exemption transparency criteria of solvency regulation rules, insurance institutions should identify the underlying assets of financial products in accordance with the principle of transparency and understand the risk-return characteristics of financial products. Section II Division of Responsibilities and Authorization Approval Article 9 Insurance institutions engaging in financial product investments should establish relevant departments or positions, clarify the responsibilities and authorities of the relevant departments or positions, ensure that incompatible departments or positions in financial product investment business are separate, restricted, and supervised. Incompatible departments or positions in financial product investment business should include at least: (1) Credit assessment and credit granting vs. investment execution; (2) Investment decision-making vs. investment execution; (3) Investment decision-making, investment execution, legal compliance, and risk management; (4) Investment decision-making, investment execution, and investment operations. Article 10 Insurance institutions engaging in financial product investments should set up related positions for financial product investment and provide professional personnel who meet regulatory requirements. Article 11 Insurance institutions engaging in financial product investments should establish a sound decision-making and authorization system, rigorously efficient business operation processes, perfect risk management systems, risk warning and disposal systems, and accountability systems to fully utilize the three lines of defense, closely cooperate with relevant functional departments, and provide independent opinions.Unified financial product investment decision-making procedures and authorization mechanism with clear rights and responsibilities, defining decision-making and approval authority for the board of directors and management team.Article 12 Insurance institutions engaging in financial product investments must establish operational procedures or detailed rules covering various business processes such as financial product evaluation, negotiation, investment decision-making, contract signing, transaction execution, and post-investment management, clarifying the responsibilities, requirements, connection methods, and operational standards of each link and relevant positions. Insurance institutions must regularly inspect and evaluate the implementation of the financial product investment-related systems. Section 3 Evaluation of Financial Products and Investment Decision-making Article 13 Insurance institutions engaging in financial product investments must establish relevant systems, clearly define the financial product standards that require due diligence investigation, and regulate the due diligence process. Article 14 Insurance institutions engaging in fixed-income financial product investments must establish credit rating models to conduct internal credit ratings, evaluate the credit risks of financing entities, guarantors, and other relevant parties, and financial products according to regulatory requirements and product types. Article 15 Insurance institutions engaging in financial product investments must evaluate the financial products to be invested in, prepare evaluation reports, and the evaluation content includes: 1. Whether the qualifications of the financial product manager meet regulatory requirements; 2. Whether the investment direction of the financial product complies with national macro policies, industrial policies, and financial regulatory requirements, and whether the credit rating meets regulatory requirements; 3. Whether the trading structure of the financial product is clear, whether there are multiple layers of nesting, and whether the rights and obligations between contract parties are clearly defined; 4. Whether the underlying assets of the financial product meet regulatory requirements and whether they involve related party assets; 5. Other matters that need to be evaluated. Article 16 Insurance institutions engaging in financial product investments should pay attention to whether the financial product manager has a mechanism in place to protect investor rights, including: 1. Whether the financial product manager or financing entity commits not to change the fund's direction without authorization; 2. Whether the financial product manager commits to include performance bonuses (if any) in management fees, without interchanging them between different products; 3. Whether the financial product manager commits to meeting regulatory requirements regarding diligence and duty of care; 4. Other matters related to investor rights protection. Article 17 Insurance institutions engaging in financial product investments must establish a prudent decision-making mechanism, set reasonable investment approval authorities, and approve investments based on a principle of one-by-one or one-by-one financial product decisions. The investment execution department or position must submit investment evaluation reports, internal credit rating reports (if any), investment contract texts or key clauses, related party transaction reports (if any), risk management, and legal and compliance opinions to the investment decision-making body for approval. The investment decision-making body must have professionalism and independence, and record the investment decision-making process through recording, video recording, or written records. The investment decision-making result must be documented in written resolutions. Section 4 Contract Signing and Transaction Execution Article 18 Insurance institutions must clarify the process of signing financial product investment contracts. The investment execution department or position must verify the transaction documents to ensure that the core elements of the intended transaction document comply with the investment decision requirements. Legal, compliance, and other departments or positions must review the contract terms and ensure they comply with the investment resolution and relevant regulatory requirements. Before signing the contract, insurance institutions must verify the actual signed contract, ensuring it matches the contract text approved by the company. Insurance institutions must standardize the contract stamping process, strictly manage seal usage, and avoid operational risks in the contract signing process. Article 19 Insurance institutions should require financial product managers to entrust custody of financial product investments and supervise custodians to strictly fulfill their custody duties according to laws, regulations, and contract agreements. Article 20 Insurance institutions must confirm all payment conditions before transferring funds and have the custody bank transfer the funds after approval and review. Article 21 Insurance institutions must promptly organize various transaction information generated during the transaction process, and timely and completely save contracts, bank transfer instructions, and other transaction documents according to relevant regulations. Section 5 Post-Investment Management Article 22 Insurance institutions engaging in financial product investments must strengthen post-investment management according to regulatory requirements and establish a post-investment management system and process led by risk control. Article 23 Insurance institutions must designate a dedicated individual to manage each financial product and regularly prepare post-investment management reports. The investment decision-making body or its authorized body must regularly review the post-investment management reports to fully understand the post-investment situation, risk management, and major issues of financial products. Article 24 Insurance institutions engaging in financial product investments must urge financial product managers to fully exercise their investment supervision role, provide reports, continuously monitor the operation of financial product management, evaluate investment risks regularly, and safeguard asset security. Key points of post-investment management of financial product investments include: 1. Production and operation and financial situation of the financing entity and guarantors; 2. Major changes in ownership of the financing entity and guarantors, significant changes in senior management, major asset changes, major violations of laws and regulations, and major legal disputes; 3. Whether the financing entity arbitrarily changes the use of funds, whether the financing entity and guarantors have significantly breached contracts or other major violations; 4. Whether the financing entity and guarantors have a negative credit rating outlook or downgrade; 5. Degree of change in asset value, asset risk classification, and provision for asset impairment; 6. Performance and diligence of the financial product manager and custodian; 7. Information disclosure of the financial product; 8. Other matters that affect the safety of insurance fund investments. Article 25 Insurance institutions must regularly evaluate the asset quality and risk status of financial products, adjust investment strategies in a timely manner, and guard against related risks. Article 26 Insurance institutions must conduct post-investment valuations and stress tests according to regulatory requirements. Post-investment valuations must adhere to independence and professionalism, and be fair and objective. Article 27 Insurance institutions engaging in financial product investments must require financial product managers to timely, accurately, truthfully, and completely disclose relevant information about the manager, financial products, and underlying assets in accordance with regulatory requirements and contract agreements. Article 28 Insurance institutions engaging in financial product investmentsContinuous tracking should be carried out for each financial product that has been invested in, and tracking records and information should be properly preserved. In the event of a credit rating adjustment for a financial product, or significant events affecting the credit of the financing entity or guarantor, the credit risk management department or position should promptly issue risk alerts and warnings. The investment execution department or position should, depending on the situation, conduct discussions with the financial product manager, conduct investigations, propose convening beneficiary meetings, and take appropriate measures.Article 29 Insurance institutions engaging in financial product investments should establish an emergency response mechanism for major unexpected events. The emergency response mechanism includes risk situations, emergency plans, work objectives, reporting lines, operational processes, and remedial measures. In the event of major investment risks, insurance institutions should activate the emergency response mechanism, make provisions for impairment in accordance with the principle of prudence, and reflect the true value of assets. Article 30 Insurance institutions shall submit reports, statements, documents, and information to regulatory authorities in accordance with regulatory requirements to ensure timeliness, accuracy, and completeness. Article 31 Insurance institutions should establish relevant systems for the unified and standardized management of investment archives for financial products. Insurance institutions should clarify the management regulations for the acquisition, filing, retention, and access of relevant documents and investment archives at each stage, as well as the responsibilities and permissions of relevant personnel. Investment archives include paper documents, electronic documents, audio, video materials related to projects. This article is selected from the "official website of the China Banking and Insurance Regulatory Commission," GMTEight Editor: Xu Wenqiang.