Article 1: These Measures are formulated to standardize the management of professional risk funds for asset valuation agencies, improve the mechanism for safeguarding professional liability of such agencies, and enhance their ability to withstand risks.

Article 2: Asset valuation agencies shall establish and use professional risk funds in accordance with the provisions of these Measures.

Article 3: An asset valuation agency shall, before the end of each accounting year, set aside a professional risk fund from its administrative expenses at a rate of no less than 5% based on the agency’s assessment service revenue for the current year, and establish a dedicated account for the purpose of accounting for this fund.

Article 4: The professional risk fund withdrawn by asset valuation agencies shall be used for the following expenditures:

(1) Civil compensation arising from professional liability;

(2) Legal fees, such as attorney fees and court costs, related to civil compensation.

After the expenditure items referred to in the first paragraph of this article occur, the portion recovered by the asset valuation agency from the relevant responsible parties shall be included in the professional risk fund.

Article 5: During the period of continued operation, asset valuation agencies shall ensure that the balance of their professional risk fund is no less than 5% of the total revenue generated from valuation services over the past five years.

If the balance of a professional risk fund established by an asset valuation agency falls below 5% of the total revenue from valuation services over the past five years due to compensation payments, the agency shall make up the shortfall by drawing on the professional risk fund before the end of the current fiscal year.

Asset valuation agencies qualified to conduct assessments related to securities and futures businesses, if their net assets fall below 2 million yuan due to the supplementary contribution to the professional risk fund, shall have their shareholders or partners inject additional capital within three months to restore the net assets to the required level.

Article 6: Provided that the asset valuation agency complies with the provisions of Paragraph 1 of Article 5 of these Measures, it may, upon resolution of its shareholders’ meeting or partners’ meeting, transfer the professional risk fund that has been set aside for more than 5 years (excluding 5 years) into distributable profits for the current year. At the same time, the agency shall完善 its relevant internal management systems.

Article 7: In the event of a merger of asset valuation agencies, the professional risk funds already set aside by each party prior to the merger shall be consolidated into the merged entity.

Article 8: In the event of a split of an asset valuation agency, the professional risk fund already set aside shall be allocated among the splitting parties in accordance with the principle of alignment between rights and responsibilities, and this allocation shall be stipulated in the split agreement.

Article 9: When an asset valuation agency undergoes liquidation, the balance of its professional risk fund shall be transferred to liquidation proceeds.

Article 10: Asset valuation agencies may enhance their ability to withstand professional liability risks by purchasing professional liability insurance in the province where the agency is located.

If an asset valuation agency purchases professional liability insurance that complies with the provisions of these Measures, it may no longer be required to set aside a professional risk fund for the year in which the insurance is purchased.

Article 11: An asset valuation agency that purchases professional liability insurance shall enter into a written insurance contract with the insurance company. In addition to complying with applicable legal provisions, the insurance contract shall also specify the following matters:

(1) The coverage applies to the assessment service income of asset valuation agencies;

(2) The scope of compensation shall be consistent with the scope of expenditures for the occupational risk fund as stipulated in Paragraph 1 of Article 4 of these Measures.

(3) The retrospective period shall extend back to the year in which the insurance was first purchased.

(4) The cumulative compensation limit shall not be less than 5% of the total business revenue assessed for the insurance year in which the policy was purchased.

Article 12: If the retrospective period of the professional liability insurance for asset valuation agencies exceeds five years and the cumulative compensation limit has already reached at least 5% of the total revenue from valuation services over the past five years, the agency may choose not to increase the cumulative compensation limit of its professional liability insurance and may allocate the balance of the professional risk fund set aside prior to five years ago.

Article 13: The professional risk fund of a branch office of an asset appraisal agency shall be uniformly collected and used by the head office.

Asset valuation agencies that purchase professional liability insurance and have branch offices should ensure that the coverage includes the assessment business income generated by their branch offices.

Article 14: Asset valuation agencies shall, in accordance with the provisions of the “Notice of the Ministry of Finance on Strengthening the Follow-up Management of Asset Valuation Agencies” (Cai Qi [2008] No. 62), submit a copy of their professional liability insurance policy and information on the cumulative professional risk fund account, audited by an accounting firm, together with the annual financial statements and other relevant materials, to the provincial-level finance department and the valuation association in their jurisdiction for record-keeping.

Asset valuation agencies qualified to conduct assessments related to securities and futures businesses shall, in accordance with the "Notice of the Ministry of Finance and the China Securities Regulatory Commission on Relevant Management Issues Concerning Asset Valuation Agencies Engaged in Securities and Futures-Related Businesses" (Cai Qi [2008] No. 81), submit, together with the basic information form of the asset valuation agency and other relevant materials, a copy of their professional liability insurance policy and audited information on the cumulative account for professional risk funds, as filed with the Ministry of Finance, the China Securities Regulatory Commission, and the China Association of Asset Appraisers.

Article 15: The Ministry of Finance and provincial-level financial authorities shall supervise the extraction, use, and allocation of professional risk funds by asset valuation agencies, as well as their purchase of professional liability insurance.

If an asset valuation agency violates the provisions of these Measures, the financial authorities at or above the provincial level shall order it to make corrections within a specified time limit, record the violation in its integrity file, and publicly announce it to the public.

Article 16: These Measures shall take effect as of February 24, 2009. In the event of any inconsistency between the provisions on professional risk funds for asset valuation agencies in force prior to the implementation of these Measures and these Measures, these Measures shall prevail.