G/TRIMS/Q/CHN/1  
 
3 June 2016  
(16-2998)  Page: 1/2  
Committee on Trade-Related Investment Measures  Original: English  
 
CHINA – PROVISIONS ON INSURA NCE SYSTEM INFORMATIZATION 
QUESTIONS FROM THE UNITED STATES 
The following communication, dated 2 June 2016, is being circulated at the request of the 
Delegation of the United States. 
 
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 On 19 April 2016, China notified the WTO Committee on Technical Barriers to Trade (TBT Committee) of a draft measure entitled Provisions on Insurance System Informatization, 
G/TBT/N/CHN/1172 (19 April 2016). This provision relates to technical requirements for 
information technology that must be observed by companies in the insurance sector. Having reviewed this submission, and the underlying measur e, the United States observed a provision of 
potential relevance to the Committee on Trade Related Investment Measures. Specifically, 
Article 53 of the measure notified to the TBT Committee states:  
Article 53 [Secure and controllable]  Insurance institutions shall give first priority 
to the procurement of secure and controllable hardware equipment and software products, steadily introduce the application of secure and controllable products; actively create conditions to raise the indigenous research and development level, and 
continuously enhance insurance institutions' strength in security and controllability of 
informatization. 
The United States observes that the phrase "sec ure and controllable" technology, in conjunction 
with the reference to "conditions to raise the indigenous research and development level, "could be 
read in context as a reference to indigenous or local technology. The U.S. seeks clarification on whether this phrase would be understood as a requirement to use indigenous or local hardware 
equipment and software products. 
 The United States is also concerned that provisions in Articles 25(2) and 54 would require purchase of indigenous encryption technology, and that such technology may be incompatible with 
the systems used by international insurance companies. These provisions state: 
 
Article 25 [Security Protection]: An insurance institution shall establish and perfect 
security management mechanisms including information system backup, antivirus, 
encryption management, intrusion detection and system logs in accordance with the following requirements: 
(2) strengthen cryptographic equipment and user management, 
employing technologies and products that are in compliance with State 
standards and encryption requirements. 
Article 54 [Encryption Application]: Insurance institutions shall gradually achieve full 
application of encryption technology in electronic policies and the insurance sector in 
strict accordance with the State work program for encryption application in the 
financial sector. G/TRIMS/Q/CHN/1 
 
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  Questions for China: 
 Question 1  
The draft Provisions on Insurance System Informatization have elicited a great deal of concern 
from international stakeholders. Can China please confirm that China is not planning to move forward quickly with any such draft?  
 
Question 2  What was the intended meaning of the phrase "secure and controllable products" in Article 53 of 
the draft measure? 
 Question 3 
 
Could China please explain the reference in Article 53 to creating conditions to raise the indigenous research and development level? What would the re lationship be between indigenous research and 
development levels, and the use of secure technology by participants in the insurance industry? 
 Question 4  
Does this reference in Article 53 imply that indige nously-developed technologies are different than 
those developed or imported from abroad in a relevant way? If so, please explain the basis for this assumption. 
 
Question 5  
How would China define the obligation in Article 53 to "give first priority" to secure and controllable 
products? How would China guarantee that a participant in the insurance industry would have the freedom to make use of the most secure technology, including technology developed or imported from outside China? 
 
Question 6  
Please describe the "State standards and encryption requirements" referenced in Article 25. How 
would China guarantee that international companies could meet these standards and requirements?  
 
Question 7  Please identify and describe the "State work program for encryption application in the financial 
sector," referenced in Article 54. Would the requirements imposed by this work program require 
purchase of indigenous encryption technology, which may be incompatible with the overall systems used by international insurance companies?  
 
Question 8  
Would the provisions cited above apply equally to domestic and foreign-owned insurance 
companies in China? Would foreign-owned co mpanies face any different requirements? 
  
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