China United Insurance Service, Inc. is a Delaware corporation organized on
June 4, 2010 by Yi Hsiao Mao, a Taiwanese citizen, and is quoted on the Over
the Counter Bulletin Board (“OTCBB”). The Company’s operating
companies are in Taiwan and China. Unless context indicates otherwise, reference
to the “Company” throughout this annual report refers to China United
and its subsidiaries. Reference to Action Holdings Financial Limited (“AHFL”),
refers to the combined operations of AHFL and its Taiwan Subsidiaries. Reference
to Anhou refers to the combined operations of Anhou and its subsidiaries.
ZLI Holdings Limited (“CU Hong Kong”), a wholly owned Hong Kong-based
subsidiary of China United, was originally founded by China United, on July
12, 2010 under Hong Kong laws. On October 20, 2010, CU Hong Kong founded a wholly
foreign owned enterprise, Zhengzhou Zhonglian Hengfu Consulting Co., Ltd. (“CU
WFOE”) in Henan province of the PRC.
Law Anhou Insurance Agency Co., Ltd. (“Anhou”, formerly known as
Zhengzhou Anhou Insurance Agency Co., Ltd.) was founded in Henan province of
the PRC on October 9, 2003. Anhou provides insurance agency services in the
PRC. On November 26, 2013, Anhou changed its name into Law Anhou Insurance Agency
Co., Ltd. and obtained its new business license. On December 18, 2013, Anhou
obtained its new Professional Insurance Agency License from local bureau of
China Insurance Regulatory Commission (“CIRC”) which reflects its
new name.
On September 26, 2013, several new PRC individual investors, namely Yanyan Wang,
Zhaohui Chen, Jing Yue, Weizhe Hou, Yong Zhang, Li Chen (“Anhou New Investors”)
and the original shareholders of Anhou, namely, Shuqin Zhu, Qun Wei, Qunlei
Fang and Yanxia Chen (“Anhou Original Shareholders”) entered into
a shareholders resolution of Anhou, pursuant to which, Anhou Original Shareholders
and Anhou New Investors agreed to increase the registered capital of Anhou to
RMB50 million ($8,165,895), among which, Yanyan Wang would invest RMB10 million
($1,633,179), accounting for 20%, Zhaohui Chen would invest RMB10 million ($1,633,179),
accounting for 20%, Jing Yue would invest RMB7.5 million ($1,224,871), accounting
for 15%, Weizhe Hou would invest RMB5 million ($816,589), accounting for 10%,
Yong Zhang would invest RMB4.5 million ($734,930), accounting for 9%, and Li
Chen would invest RMB3 million ($489,949), accounting for 6%, of the registered
capital of Anhou.
Due to PRC legal restrictions on foreign ownership and investment in the insurance
agency businesses in China, particularly those based on qualifications as well
as capital requirements of the investors, Able Capital Holding Co., Ltd., a
limited liability company established and registered in Hong Kong, delegated
four PRC individuals, namely Yanyan Wang, Zhaohui Chen, Weizhe Hou and Yong
Zhang, to invest in Anhou on its behalf.
On October 24, 2013, Anhou completed the registration with local Administration
Industry and Commerce (“AIC”) on the above-mentioned capital increase.
The new business license was issued to Anhou on October 25, 2013.
The registered capital increase of Anhou was in response to the promulgations
of certain regulations by China Insurance Regulatory Commission (“CIRC”).
On April 27, 2013, CIRC issued the Decision on Revising the Provisions of the
Supervision and Administration of Specialized Insurance Agencies (the “Decision
on Revising the Agency Provisions”), pursuant to which, CIRC has mandated
any insurance agency established subsequent to the Decision on Revising the
Agency Provisions to meet a minimum registered capital requirement of RMB50
million ($8,165,890). On May 16, 2013, CIRC issued Notice for Further Clarification
on Related Issues of Access to Professional Insurance Intermediary Market (the
“Notice”), pursuant to which, professional insurance agencies established
prior to the issuance of the Decision on Revising the Agency Provisions, with
registered capital less than RMB50 million ($8,165,890), can continue operation
of their existing business within the provinces where they have the registered
office or branch office, but shall not set up any new branches in any province
where they do not have the registered office or any branch office.
Law Broker and Anhou market and sell to customers two broad categories of insurance
products: life insurance products and property and casualty insurance products,
both focused on meeting the particular insurance needs of individuals. The insurance
products that Law Broker and Anhou sell are underwritten by some of the leading
insurance companies in Taiwan and China, respectively.
Through Anhou’s wholly-owned insurance brokerage firm Jiangsu Law, it
also closely interacts with insurance companies and actively locates and introduces
the right customers in Anhou’s database matching the insurance products
offered by such insurance companies to them.
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