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CORRESP
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CORRESP

[Letterhead of CNinsure Inc.]

November 24, 2010

VIA EDGAR AND FACSIMILE

Mr. Jim B. Rosenberg, Senior Assistant Chief Accountant

Ms. Ibolya Ignat, Staff Accountant

Division of Corporation Finance

Mailstop 3030

Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549

    Re:

    CNinsure Inc.
Form 20-F for the fiscal year ended December 31, 2009
filed on May 7,
2010 (File No. 001-33768)

Dear Mr. Rosenberg and Ms. Ignat,

This letter sets forth our responses to the comments contained in the letter dated November 3, 2010 from the Staff
regarding our annual report on Form 20-F for the year ended December 31, 2009. For your ease of review, the Staff’s
comments are reproduced below, followed by our responses.

Consolidated Financial Statements

Notes to Consolidated Financial Statements

(19) Share-based Compensation

2007 Options, page F-36

    1.

    You disclose that upon voluntary surrender by option holders you canceled options to purchase an
aggregate of 30,804,500 shares in December 2008 and recognized RMB 29,634 for the remaining unamortized
expenses in connection with the cancellation. You also issued options to purchase 32,000,000 shares to
your employees and directors in November 2008. Please tell us if you accounted for the cancellation of
the 30,804,500 shares as a cancellation or a modification and reference the authoritative literature
supporting your accounting treatment. Please revise your disclosures to clarify your accounting policy
for the cancellation and modification of options to purchase shares.

On October 31, 2007, we granted options to purchase 42,000,000 of our ordinary shares (the “2007
Options”) to our employees with an exercise price of $0.80 per ordinary share. We determined that the
value of each of our ordinary share as of October 31, 2007 was equal to our initial public offering
price of $0.80 per ordinary share, and as a result, the 2007 Options had no intrinsic value as of the
grant date.

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On November 21, 2008, we granted options to purchase 32,000,000 of our ordinary shares (the “2008
Options”) to our employees with an exercise price equal to the closing price per ordinary share quoted
on the Nasdaq Global Market at the grant date, or $0.278 per ordinary share.

In December 2008, employees holding 91.6% of the then outstanding 2007 Options voluntarily surrendered
their options because the market price of the underlying ordinary shares was significantly below the
exercise price and certain of those employees were unable to meet the performance conditions for the
vesting of the options. We paid no compensation related to the surrender of these options.

According to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)
718-20-35-9,

“a cancellation of an award that is not accompanied by the concurrent grant of (or offer to grant of)
a replacement award or other valuable consideration shall be accounted for as a repurchase for no
consideration. Accordingly, any previously unrecognized compensation cost shall be recognized at the
cancellation date.”

In contrast, according to FASB ASC 718-20-35-3,

“a modification of the terms or conditions of an equity award shall be treated as an exchange of the
original award for a new award. In substance, the entity repurchases the original instrument by
issuing a new instrument of equal or greater value, incurring additional compensation cost for any
incremental value.”

We believe the cancellation of the 30,804,500 shares should be accounted for as a cancellation under
ASC 718-20-35-9 because we did not grant any new options to replace the cancelled 2007 Options nor did
we provide any compensation to option holders who voluntarily surrendered options to purchase an
aggregate of 30,804,500 ordinary shares. As a result, the previously unrecognized compensation cost
should be recognized on the date of cancellation.

We submit that the 2008 Options were not replacements for the 2007 Options for the following reasons:

    •

    Different grantees. The 2008 Options were granted to certain senior management and key
employees, while the 2007 Options were granted to a much broader group of management and
employees.

    •

    Communication to the grantees. In November 2008, we announced the grant of the 2008 Options
without reference to the 2007 Options. In December 2008, due to the market condition mentioned
above, we announced the cancellation of the 2007 Options. Therefore, the cancellation of the 2007
Options and the grant of the 2008 Options are not considered a concurrent event nor a replacement
reward.

We will revise our future filings to include the following language:

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“The Company has accounted for any award that is accompanied by the concurrent grant of (or offer to
grant of) a replacement award or other valuable consideration as a modification of terms or conditions
of an equity award. The additional compensation cost for any incremental value of the replacement
award is recognized over the vesting period.

For any award that is not accompanied by the concurrent grant of (or offer to grant of) a replacement
award or other valuable consideration, the Company has accounted for such transaction as a
cancellation of the award. Any previously unrecognized compensation cost is recognized at the
cancellation date.”

Item 15. Controls and Procedures, page 96

    2.

    We note that you conduct substantially all of your operations outside of the United States. In
order to enhance our understanding of how you prepare your financial statements, we ask that you provide
us with information that will help us answer the following questions.

How do you evaluate and assess internal control over financial reporting?

    •

    Please describe the process you used to determine whether internal control over financial reporting
effectively considered controls to address financial reporting risks that are relevant to all locations
where you have operations.

We advise the Staff that we have implemented measures for establishing, evaluating, and monitoring the
effectiveness of internal control over financial reporting under the framework issued by the Committee
of Sponsoring Organization of the Treadway Commission. Our internal control over financial reporting
includes control environment, risk assessment, control activities, information and communication and
monitoring. We conduct operations in 22 provinces in China and all of our subsidiaries are required to
follow the same internal control framework established by our corporate headquarters. We have adopted
a top-to-bottom approach to address financial reporting risks, which are identified based on the risks
raised by the management of each department in each subsidiary and subsequently reviewed by our
corporate headquarters, which has designed and performed related procedures for financial and
operational processes. Each department in each subsidiary evaluates its relevant risks periodically
based on its operations and the identified risks are communicated to and consolidated by our corporate
headquarters, which in turn evaluates the potential impact of the risks on financial reporting. Risks
that are considered to have an impact on financial reporting are regarded as financial reporting
risks. Relevant controls are designed and implemented to address such risks and to ensure the
accuracy and completeness of the financial statements.

Specifically, we have relied on the following procedures to determine that our internal control over
financial reporting effectively addresses the financial reporting risks:

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    Entity-Level Control. To address risks associated with financial reporting, we have adopted a
series of policies and procedures which are established by our corporate headquarter and
implemented by each subsidiary. The policies and procedures include a code of business conduct
and ethics, corporate governance guidelines, an audit committee charter, guidelines for business
operations, organization and authorization policies and procedures, human resources policies and
procedures, risk assessment for acquisition targets, financial reporting risk assessment,
anti-fraud self-assessment, whistleblower policies and procedures, Foreign Corrupt Practices Act
guidelines, information and communication guidelines and internal monitoring and audit
procedures.

    •

    Process-Level Controls. We have designed the Standards of Procedures (“SOP”) which is a
standard set of policies, procedures and controls implemented by each subsidiary. The SOP covers
financial reporting procedures of each subsidiary and key components in financial reporting, such
as revenues, costs, expenses, fixed assets, taxes, payrolls, budgets and information systems. Our
internal audit team periodically performs testing to confirm that the control procedures set
forth in the SOP have been implemented as designed and that they are operating effectively at
each subsidiary.

    •

    Information Technology-Level Controls. We utilize a widely recognized financial processing
software in China which was purchased from a reputable vendor and customized by our internal
information technology department. We have also implemented general information technology
environment and application controls to ensure system stability. Accounting managers in our
corporate headquarter are able to assess and review the financial records of each subsidiary
through the internal accounting network.

Furthermore, our internal audit team performs testing on internal controls at the subsidiary level and
reports the findings to our audit committee and senior management periodically. This process supports
our evaluation of the effectiveness of our internal control over financial reporting as part of our
compliance with the requirements of the Sarbanes-Oxley Act of 2002.

    •

    If you have an internal audit function, please describe it and explain how, if at all, that function
impacted your evaluation of your internal control over financial reporting.

We have set up an internal audit team consisting of twelve staff members. The internal audit team
periodically performs testing on the design and implementation and operating effectiveness of the
control procedures set forth in the SOP in each subsidiary in accordance with the internal audit
team’s criteria. The internal audit team reports directly to our audit committee which periodically
reviews the findings of the internal audit team.

How do you maintain your books and record and prepare your financial statements?

    •

    If you maintain your books and records in accordance with US GAAP, describe the controls you maintain
to ensure that the activities you conduct and the transactions you consummate are recorded in accordance
with US GAAP.

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    If you do not maintain your books and records in accordance with US GAAP, tell us what basis of
accounting you use and describe the process you go through to convert your books and records to US GAAP
for SEC reporting. Describe the controls you maintain to ensure that you have made all necessary and
appropriate adjustments in your conversions and disclosures.

We advise the Staff that we keep our books and records in accordance with generally accepted
accounting principles in the People’s Republic of China (“PRC GAAP”) on a daily basis and convert our
financial information into financial statements prepared in accordance with generally accepted
accounting principles in the United States (“U.S. GAAP”) for quarterly financial reporting. We have a
PRC accounting department responsible for daily books and recordkeeping in accordance with PRC GAAP
and a U.S. financial reporting department responsible for converting our financial information into
financial statements prepared in accordance with U.S. GAAP.

Financial information of subsidiaries are prepared by the local accounting teams and reviewed by local
financial managers and presidents on a monthly basis. The financial information is then passed to the
corporate accounting department, which reconciles the subsidiaries’ financial information to the
general ledgers and prepares the combined financial information under PRC GAAP on a quarterly basis.
The PRC GAAP combined financial information are then passed to the U.S. financial reporting department
for performing U.S. GAAP conversion and consolidation. We have established SOP for financial reporting
procedures that are applicable to the financial information of all of our entities. The financial
reporting SOP covers every step in financial reporting, from bookkeeping to GAAP conversion and
disclosure. The internal audit team maintains and updates the SOP. It also oversees the
implementation of SOP annually by performing the testing on the design and implementation and
operating effectiveness of the control procedures set forth in SOP for U.S. GAAP conversion and
disclosure. U.S. GAAP conversion and disclosure include checklists and over 20 standard working
papers, which are required to ensure the accuracy and completeness of all relevant adjustments. We
have also used the U.S. GAAP checklists prepared by other major accounting firms as guidance to
prepare the annual U.S. GAAP financial statements and notes disclosure. The U.S. financial statements
are prepared by assistants in the U.S. financial reporting team and reviewed by the controller
quarterly. The controller performs detailed checks of the accuracy and completeness of the U.S. GAAP
conversion and consolidation adjustments and performs financial analysis. The U.S. financial
statements are passed to the Chief Financial Officer (“CFO”) for approval. The CFO reviews the U.S.
financial statements and relevant supporting analysis for overall financial reasonableness. The
approved U.S. financial statements are subsequently submitted to the Chief Executive Officer and the
Audit Committee quarterly.

Who is involved in your financial reporting?

We would like to understand more about the background of the people who are primarily responsible for preparing
and supervising the preparation of your financial statements and their knowledge of US GAAP and SEC rules and
regulations. Without identifying people by name, for each person, please tell us:

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    what role he or she takes in preparing your financial statements;

    •

    what relevant education and ongoing training he or she has had relating to US GAAP;

    •

    the nature of his or her contractual or other relationship to you;

    •

    whether he or she holds and maintains any professional designations such as Certified Public Accountant
(US) or Certified Management Accountant; and

    •

    about his or her professional experience, including experience in preparing and/or auditing financial
statements prepared in accordance with US GAAP.

We have a U.S. financial reporting team that consists of three staff, including one controller and two
assistants. The financial reporting team receives detailed financial information from all entities
within our group, performs analysis to identify differences between PRC GAAP and U.S. GAAP, posts GAAP
adjustments and performs consolidation under U.S. GAAP in accordance with the procedures set forth in
the SOP.

Role taken in preparing financial statements

Our controller reviews the consolidated financial statements prepared by the staff and assistants and
passes them to our chief financial officer for his review. Our CFO reports the financial results to
our audit committee and our board of directors on a quarterly basis.

Relevant education and ongoing training related to U.S. GAAP

Members of our U.S. financial reporting team attend the quarterly U.S. GAAP and SEC rule update
seminars and U.S. GAAP training programs conducted by other major accounting firms. Our financial
reporting team members also keep themselves informed of updates to U.S. GAAP th