SecProbe.io

CORRESP
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 filename1.htm

 May 26, 2026

 VIA EDGAR

 Division of Corporation Finance

 Securities and Exchange Commission

 100 F Street, N.E.

 Washington, D.C. 20549

 Re:
 AIFU Inc. (CIK No. 0001413855)

 Registration Statement on Form F-3 (File No.
 333-296229)
 Acceleration Request

 Ladies and Gentlemen:

 In accordance with Rule 461
of the General Rules and Regulations under the Securities Act of 1933, as amended (the " Act "), AIFU Inc.
(the " Company ") hereby requests that the effectiveness of the above-referenced Registration Statement on Form F-3
(the " Registration Statement ") be accelerated to, and that the Registration Statement become effective at, 4:00 p.m.,
Eastern Daylight Time, on May 28, 2026, or as soon thereafter as practicable. In making this acceleration request, the Company acknowledges
that it is aware of its responsibilities under the Act.

 If there is any change in the
acceleration request set forth above, the Company will promptly notify you of the change, in which case the Company may be making an oral
request of acceleration of the effectiveness of the Registration Statement in accordance with Rule 461. The request may be made by
an executive officer of the Company or by any attorney from the Company's U.S. counsel, Han Kun Law Offices LLP.

 [Signature page follows]

 Very truly yours,

 AIFU Inc.

 By:
 /s/ Mingxiu Luan

 Name:
 Mingxiu Luan

 Title:
 Chief Executive Officer

<DOCUMENT>
<TYPE>TEXT-EXTRACT
<SEQUENCE>2
<FILENAME>filename2.txt
<TEXT>
 May 15, 2026

Mingxiu Luan
Chief Executive Officer
AIFU Inc.
Room 1, Building 10,
Jinzhong Guobin Hui Qinyuan 2nd Road
Lihu Community, Xili Street
Shenzhen, 518055
People s Republic of China

 Re: AIFU Inc.
 Draft Registration Statement on Form F-3
 Submitted May 8, 2026
 CIK No. 0001413855
Dear Mingxiu Luan:
 This is to advise you that we do not intend to review your registration
statement.
 We request that you publicly file your registration statement and
non-public draft
submission on EDGAR at least two business days prior to the requested effective
date and time.
Please refer to Rules 460 and 461 regarding requests for acceleration. We
remind you that the
company and its management are responsible for the accuracy and adequacy of
their disclosures,
notwithstanding any review, comments, action or absence of action by the staff.
 Please contact Eric Envall at 202-551-3234 with any questions.

 Sincerely,

 Division of
Corporation Finance
 Office of Finance
cc: Steve Lin
</TEXT>
</DOCUMENT>

United States securities and exchange commission logo
September 7, 2023
Yinan Hu
Chief Executive Officer
Fanhua Inc.
60/F, Pearl River Tower
No. 15 West Zhujiang Road
Guangzhou, Guangdong 510623
People’s Republic of China
Re:Fanhua Inc.
Annual Report on Form 20-F
Filed April 25, 2023
File No. 001-33768
Dear Yinan Hu:
            We have completed our review of your filing.  We remind you that the company and its
management are responsible for the accuracy and adequacy of their disclosures, notwithstanding
any review, comments, action or absence of action by the staff.
Sincerely,
Division of Corporation Finance
Office of Finance
cc:       Alice Tang, Esq.

CORRESP
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August 18, 2023

VIA CORRESPONDENCE

Jimmy McNamara

Jennifer Thompson

William Schroeder

John Spitz

Robert Arzonetti

Tonya Aldave

Division of Corporation Finance

Office of Finance

Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549

 Re: Fanhua Inc.

Amendment No. 1 to the Annual Report on Form 20-F

Filed May 22, 2023

Annual Report on Form 20-F

Filed April 25, 2023

File No. 001-33768

Dear Mr. McNamara, Ms. Thompson, Mr. Schroeder, Mr.
Spitz, Mr. Arzonetti and Ms. Aldave:

This letter sets forth the response
of Fanhua Inc. (the “Company”) to the comments contained in the letter dated July 28, 2023 from the staff (the “Staff”)
of the Securities and Exchange Commission (the “Commission”) regarding the Company’s annual report on Form 20-F for
the fiscal year ended December 31, 2022 originally filed with the Commission on April 25, 2023 (the “Form 20-F”), and was
amended by the Amendment No. 1 to the Form 20-F filed with the Commission on May 22, 2023.

For ease of review, we have set
forth below each of the numbered comments of the Staff’s letter and the Company’s responses thereto.

Annual Report on Form 20-F

Item 5. Operating and Financial Review and Prospects,
page 76

 1. Please revise your Operating and Financial Review and Prospects section in future filings to discuss
your financial condition and changes in financial condition for each of the periods presented as required by Item 303(a) of Regulation
S-K. Please also refer to the instructions to Item 5 of Form 20-F and SEC Release Nos. 33-6835 and 33-8350.

In response to the Staff’s comment, the
Company will disclose the discussion of our financial condition and changes in financial condition for each of the periods presented in
future filings substantially in the same form as follows, with the added disclosure underlined and the removed disclosure crossed out
for ease of reference:

Discussion of Certain Balance Sheet Items

The following table sets forth certain selected
consolidated balance sheets data as of December 31, 2021 and 2022.

    As of December 31

    2021
    2022

    RMB
    RMB
    US$

    (in thousands)

    Selected Consolidated Balance Sheets Data

    ASSETS:

    Short term investments
      870,682
      347,754
      50,420

    Other receivables, net
      60,755
      231,049
      33,499

    Other current assets, net
      39,947
      419,735
      60,856

    Contract assets, net of allowances
      263,425
      273,954
      39,720

    Contract assets - non-current, net of allowances
      192,114
      385,834
      55,941

    Investments in affiliates
      335,808
      4,035
      585

    Total assets
      3,242,118
      3,089,516
      447,938

    LIABILITIES AND EQUITY:

    Short-term loan
      —
      35,679
      5,173

    Accrued commissions
      41,837
      74,432
      10,792

    Accrued commissions – non-current
      97,869
      192,917
      27,970

    Total liabilities
      1,281,756
      1,358,185
      196,918

    Total equity
      1,960,362
      1,731,331
      251,020

    Total liabilities and equity
      3,242,118
      3,089,516
      447,938

Short-term investments

Short-term investments mainly
consist of bank financial products, trust products and asset management plans. As compared with the balance as of December 31, 2021, short-term
investments as of December 31, 2022 decreased by RMB522.7 million, mainly due to a decrease in purchasing of bank financial products as
a result of a decline in expected rate of return on such investment products.

Other receivable, net

Other receivable mainly
represented advances to staffs or entrepreneurial agents of the Group for daily business operations, rental deposits and advances to third
parties. As compared with the balance as of December 31, 2021, other receivables as of December 31, 2022 increased by RMB170.3 million,
mainly due to (i) term-loan to Sichuan Tianyi Real Estate Development Co., Ltd. (“Sichuan Tianyi”), a third party real estate
developer, of RMB80.0 million in principal and corresponding interest receivable of RMB3.4 million as of December 31, 2022. The loan is
guaranteed by the ultimate controlling owner of Sichuan Tianyi, whom is jointly liable, with an interest rate of 7.2% per annum; and (ii)
term-loan to Shenzhen Yingxin Asset Management Co., Ltd. of RMB100.0 million as of December 31, 2022, with an interest rate of 7.3% per
annum. As of December 31, 2022, the interests accrued have been paid. These loan receivables are expected to be settled within one year.

Other current assets, net

Other current assets represent
prepayment to third parties. As compared with the balance as of December 31, 2021, other current assets as of December 31, 2022 increased
by RMB379.8 million, mainly due to prepayments of RMB390.0 million in a short term investment in a limited partnership project. As the
Company has not yet been registered as Limited Partner legally as of December 31, 2022, the Company recorded the payment as other current
assets instead of short term investments.

    2

Contract assets, net of allowances

Contract assets consist
of (i) amount derived from estimated renewal commissions and (ii) initial commissions earned in relation to policies that are still in
the hesitation period as of December 31, 2021 and 2022. The Company presents contract assets to be reclassified to accounts receivable
within the next twelve months and after the next twelve months as current contract assets and non-current contract assets separately in
the consolidated balance sheets as of December 31, 2021 and 2022, respectively. As compared with the balance as of December 31, 2021,
the total balance of contract assets including both current and non-current portion as of December 31, 2022 increased by RMB204.2 million,
mainly due to an increase of RMB229.2 million arising from selling new polices and cumulative catch-up adjustments to revenue that affect
the corresponding contract asset amounting RMB238.5 million arising from a change in estimated variable consideration on an ongoing basis,
which are offset by a decrease of RMB263.4 million when the Group’s right to commissions earned becomes unconditional.

Investments in Affiliates

Investment in affiliates
represents equity investments with significant influence by the right to nominate one board member in the investees. As of December 31,
2022, the balance of investment in affiliates decreased by RMB331.8 million as compared with the balance as of December 31, 2021, after
the Company completed the distribution of 252,995,600 ordinary shares of one of the investees, CNFinance Holdings Limited, or CNFinance,
to its shareholders on a pro rata basis on June 28, 2022. As a result of the share distribution, the Company’s equity interest in
CNFinance decreased from approximately 18.5% to approximately 0.01%. Upon the completion of the distribution, the Company ceased to account
for the remaining equity investment in CNFinance using equity method as the Company no longer has significant influence over this investee.

Short-term loan

Short-term loan represented
borrowings made by the Company’s subsidiaries from financial institutions in mainland China and were repayable within one year.
The balance of short term loan as of December 31, 2022 increased by RMB 35.8 million as compared with the balance as of December 31, 2021,
mainly due to a newly raised bank loan from a commercial bank in China in 2022 which bears an interest rate of 4.5% per annum.

Accrued commissions

Accrued commissions represented
costs related to estimated renewal commissions. The Company presented estimated renewal commission costs to be paid within the next twelve
months and after the next twelve months as current accrued commissions and non-current accrued commissions separately in the consolidated
balance sheets as of December 31, 2021 and 2022, respectively. As of December 31, 2022, the balances of current and non-current accrued
commissions increased by RMB32.6 million and RMB95.0 million, respectively, as compared with the balances as of December 31, 2021. The
increase was mainly due to a comprehensive impact of increased estimated renewal commission cost for new policies sold during 2022 and
cumulative catch-up adjustments to estimated variable commissions accrued as a result of declining constraint percentage applied on an
ongoing basis.”

    3

Item 16I. Disclosure Regarding Foreign Jurisdictions
that Prevent Inspections, page 124

 2. We note your statement that you reviewed the Company’s register of members and public filings
with shareholders, including the Schedule 13D/A filed jointly by Sea Synergy Limited and Mr. Yinan Hu on December 23, 2022 and the Schedule
13G/A filed by Bank of America Corporate Center on February 14, 2023, in connection with your required submission under paragraph (a).
Please supplementally describe any additional materials that were reviewed and tell us whether you relied upon any legal opinions or third
party certifications such as affidavits as the basis for your submission. In your response, please provide a similarly detailed discussion
of the materials reviewed and legal opinions or third party certifications relied upon in connection with the required disclosures under
paragraphs (b)(2) and (3).

Response:

Ownership and/or controlling
financial interest held by governmental entity of mainland China with respect to the Company

In connection with the required
disclosures under paragraphs (a) and (b)(3) of Item 16I with respect to the Company, the Company respectfully submits that it relied on
the beneficial ownership schedules, namely, the Schedule 13Gs, Schedule 13Ds and the amendments thereto, filed by the Company’s
major shareholders. Because such major shareholders are legally obligated to file beneficial ownership schedules with the Commission,
the Company believes such reliance is reasonable and sufficient. Based on the examination of the Schedule 13Gs, Schedule 13Ds and the
amendments thereto filed by the Company’s major shareholders, other than Mr. Yinan Hu and Sea Synergy Limited, no shareholder beneficially
owned 5% or more of the Company’s total outstanding shares as of March 31, 2023.

Mr. Yinan Hu is the chief executive
officer and chairman of the board of directors of the Company. Additionally, Sea Synergy Limited is 100% held by a family trust, of which
Mr. Yinan Hu is the settlor and co-beneficiary. Pursuant to Section 13(d) of the Exchange Act and the rules promulgated thereunder, Mr.
Yinan Hu may be deemed to beneficially own all of the shares of the Company held by Sea Synergy Limited. In addition, based on the examination
of the Schedule 13G/A filed by Bank of America Corporation (NYSE: BAC) on February 14, 2023, Bank of America Corporation beneficially
owned 4.9% of the Company’s total outstanding shares. The 2023 Proxy Statement filed on March 8, 2023 indicates that other than
Warren E. Buffett/Berkshire Hathaway Inc., BlackRock, Inc. and The Vanguard Group, no shareholder beneficially owned more than 5% of the
outstanding shares of common stock of Bank of America Corporation as of December 31, 2022. Based on the foregoing, Bank of America Corporation
is not owned or controlled by governmental entities in mainland China.

Furthermore,
the Company has reviewed its register of members as of March 31, 2023, which indicates that its shareholders consisted of: (i) J.P. Morgan
Chase Bank, N.A., (ii) a natural person shareholder and entities owned or controlled, directly or indirectly, by certain natural persons
who are members of the management and key employees of the Company, and (iii) certain other institutional shareholders, each holding
less than 5% of the Company’s shares.

 ● J.P.
Morgan Chase Bank, N.A. is the depositary of the Company’s ADSs and acts as the attorney-in-fact for the ADS holders. It would
present an undue hardship for the Company to verify the background of each ADS holder due to the large number of such holders, and the
Company could only rely on the beneficial ownership schedules filed by the beneficial owners of 5% or more of the Company’s shares.
As discussed above, based on the beneficial ownership schedules, no governmental entities in mainland China or the Cayman Islands own
shares of any of the beneficial owners of 5% or more of the Company’s shares.

 ● The
natural person shareholder is a former executive officer of the Company and holds 16 ordinary shares of the Company. The Company further
confirms that no governmental entities in mainland China or the Cayman Islands has any interest in any of the entities owned or controlled,
directly or indirectly, by certain natural persons who are members of the management or key employees of the Company.

    4

 ● In
terms of certain other institutional shareholders, based on the Company’s review of their websites, to the Company’s knowledge,
no governmental entities in mainland China or the Cayman Islands own shares of any of the institutional shareholders, with the exception
of Hongkong Chiho Limited, which is a minority shareholder of the Company. Hongkong Chiho Limited is a company incorporated in Hong Kong
and held 0.3% of the total outstanding shares of the Company. It is wholly-owned by China’s state-owned enterprises.

Based
on the foregoing, the Company has determined that with the exception of Hongkong Chiho Limited, it is not owned or controlled by governmental
entities in mainland China, and that the governmental entities in mainland China do not have a controlling financial interest
in the Company.

Ownership held by governmental
entity of Cayman Islands with respect to the Company

In connection with the required
disclosures under paragraph (b)(2) of Item 16I with respect to the Company, based on the analysis above, to the Company’s knowledge,
no governmental entities in the Cayman Islands own any shares of the Company.

Ownership and/or controlling
financial interest held by governmental entities in applicable foreign jurisdictions with respect to the Company’s consolidated
foreign operating entities, including variable interest entities

In connection with the required
disclosures under paragraphs (b)(2) and (b)(3) of Item 16I with respect to the Company’s consolidated foreign operating entities,
including variable interest entities, the Company respectfully submits that it conducts operations through (i) operating subsidiaries
in which it has equity ownership and (ii) contractual arrangements with the variable interest entities and their respective subsidiaries,
all incorporated in mainland China. The variable interest entities are Shenzhen Xinbao Investment Management Co., Ltd., or Xinbao Investment,
and Fanhua RONS (Beijing) Technologies Co., Ltd., or Fanhua RONS Technologies, which we collectively refer to as the “consolidated
VIEs” in this submission.

Exhibit 8.1 to the Form 20-F
sets forth a list of subsidiaries and the consolidated VIEs and their subsidiaries, being the Company’s consolidated operating entities
incorporated in various jurisdictions. The jurisdictions in which those consolidated foreign operating entities are incorporated are Cayman
Islands, British Virgin Islands, Hong Kong, and mainland China. Except for the operating entities as discussed below and the consolidated
VIEs and their subsidiaries, the Company holds 100% equity interests in each such consolidated foreign operating entity.

In terms of (23) Hunan Fanhua
Insurance Agency Co., Ltd., (24) Zhongrong Smart Finance Information Technology Co., Ltd., or Zhongrong Smart, (27) Jilin Zhongji Shi’an
Agency Co., Ltd., (28) Wuhan Taiping Online Insurance Agency Co., Ltd., and (31) Fanhua Insurance Surveyors & Loss Adjustors Co.,
Ltd., or FISLA as set out in Exhibit 8.1, the Company holds 77%, 53.44%, 51%, 51%, and 44.7% equity interests in each such operating entity,
respectively. The remaining equity interests of eac

United States securities and exchange commission logo
July 28, 2023
Yinan Hu
Chief Executive Officer
Fanhua Inc.
60/F, Pearl River Tower
No. 15 West Zhujiang Road
Guangzhou, Guangdong 510623
People’s Republic of China
Re:Fanhua Inc.
Amendment No. 1 to the Annual Report on Form 20-F
Filed May 22, 2023
Annual Report on Form 20-F
Filed April 25, 2023
File No. 001-33768
Dear Yinan Hu:
            We have reviewed your filing and have the following comments.  In some of our
comments, we may ask you to provide us with information so we may better understand your
disclosure.
            Please respond to these comments within ten business days by providing the requested
information or advise us as soon as possible when you will respond.  If you do not believe our
comments apply to your facts and circumstances, please tell us why in your response.
            After reviewing your response to these comments, we may have additional comments.
Annual Report on Form 20-F
Item 5. Operating and Financial Review and Prospects, page 76
1.Please revise your Operating and Financial Review and Prospects section in future filings
to discuss your financial condition and changes in financial condition for each of the
periods presented as required by Item 303(a) of Regulation S-K. Please also refer to the
instructions to Item 5 of Form 20-F and SEC Release Nos. 33-6835 and 33-8350.
Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections, page 124
2.We note your statement that you reviewed the Company’s register of members and public

 FirstName LastNameYinan Hu
 Comapany NameFanhua Inc.
 July 28, 2023 Page 2
 FirstName LastNameYinan Hu
Fanhua Inc.
July 28, 2023
Page 2
filings with shareholders, including the Schedule 13D/A filed jointly by Sea Synergy
Limited and Mr. Yinan Hu on December 23, 2022 and the Schedule 13G/A filed by Bank
of America Corporate Center on February 14, 2023, in connection with your required
submission under paragraph (a). Please supplementally describe any additional materials
that were reviewed and tell us whether you relied upon any legal opinions or third party
certifications such as affidavits as the basis for your submission. In your response, please
provide a similarly detailed discussion of the materials reviewed and legal opinions or
third party certifications relied upon in connection with the required disclosures under
paragraphs (b)(2) and (3).
3.In order to clarify the scope of your review, please supplementally describe the steps you
have taken to confirm that none of the members of your board or the boards of your
consolidated foreign operating entities are officials of the Chinese Communist Party. For
instance, please tell us how the board members’ current or prior memberships on, or
affiliations with, committees of the Chinese Communist Party factored into your
determination. In addition, please tell us whether you have relied upon third party
certifications such as affidavits as the basis for your disclosure.
4.We note that your disclosures pursuant to Items 16I(b)(2), (b)(3) and (b)(5) are provided
for “Fanhua Inc. or the consolidated VIEs.” We also note that your list of subsidiaries and
affiliated entities in Exhibit 8.1 appears to indicate that you have subsidiaries that are not
included in your VIEs. Please note that Item 16I(b) requires that you provide disclosures
for yourself and your consolidated foreign operating entities, including variable interest
entities or similar structures.
•With respect to (b)(2), please supplementally clarify the jurisdictions in which your
consolidated foreign operating entities are organized or incorporated and confirm, if
true, that you have disclosed the percentage of your shares or the shares of
your consolidated operating entities owned by governmental entities in each foreign
jurisdiction in which you have consolidated operating entities. Alternatively, please
provide this information in your supplemental response.
•With respect to (b)(3) and (b)(5), please provide the required information for you and
all of your consolidated foreign operating entities in your supplemental response.
5.With respect to your disclosure pursuant to Item 16I(b)(5), we note that you have included
language that such disclosure is “to our knowledge.” Please supplementally confirm
without qualification, if true, that your articles and the articles of your consolidated
foreign operating entities do not contain wording from any charter of the Chinese
Communist Party.
Notes to the Consolidated Financial Statements
(e) Accounts receivable and Contract Assets, page F-17
6.Please revise future filings to include your policy for determining past-due or delinquency
status for your accounts receivable and contract assets and your policy for recognizing
write-offs within the allowance for doubtful accounts. Please refer to ASC 326-20-50-17.

 FirstName LastNameYinan Hu
 Comapany NameFanhua Inc.
 July 28, 2023 Page 3
 FirstName LastName
Yinan Hu
Fanhua Inc.
July 28, 2023
Page 3
7.Please revise future filings to include the disclosures required by ASC 606-10-50-9 and
ASC 606-10-50-10 for your contract assets.
            We remind you that the company and its management are responsible for the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action or absence of
action by the staff.
            Contact Jimmy McNamara at (202) 551-7349 or Jennifer Thompson at (202) 551-3737 if
you have any questions about comments related to your status as a Commission-Identified Issuer
during your most recently completed fiscal year.
            You may contact William Schroeder at (202) 551-3294 or John Spitz at (202) 551-3484 if
you have questions regarding comments on the financial statements and related matters.  Please
contact Robert Arzonetti at (202) 551-8819 or Tonya Aldave at (202) 551-3601 with any other
questions.
Sincerely,
Division of Corporation Finance
Office of Finance

United States securities and exchange commission logo
March 5, 2021
Peng Ge
Chief Financial Officer
Fanhua Inc.
27/F, Pearl River Tower
No. 15 West Zhujiang Road
Guangzhou, Guangdong 510623
People's Republic of China
Re:Fanhua Inc.
Form 20-F for the Fiscal Year Ended December 31, 2019
Filed April 29, 2020
File No. 001-33768
Dear Mr. Ge:
            We have completed our review of your filing.  We remind you that the company and its
management are responsible for the accuracy and adequacy of their disclosures, notwithstanding
any review, comments, action or absence of action by the staff.
Sincerely,
Division of Corporation Finance
Office of Finance

CORRESP
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February
22, 2021

VIA
CORRESPONDENCE

Mark
K. Brunhofer

Division of Corporation Finance

Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549

 Re: Fanhua
                                         Inc.

                                         Form 20-F for the Fiscal Year Ended December 31, 2019

                                         Filed April 29, 2020

                                         File No. 001-33768

Dear
Mr. Brunhofer:

This
letter sets forth the response of Fanhua Inc. (the “Company”) to the additional comments contained in the letter dated
December 23, 2020 from the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”)
relating to responses to the previous comments of the Staff on November 12, 2020 letter regarding the Company’s annual report
on Form 20-F for the fiscal year ended December 31, 2019 (the “2019 Form 20-F”).

For
your convenience, we have set forth below each of the numbered comments of the Staff’s letter and the Company’s responses
thereto.

Form
20-F for the Fiscal Year Ended December 31, 2019

Notes
to the Consolidated Financial Statements

Note
2: Summary of Significant Accounting Policies

(r)
Revenue Recognition

Insurance
agency services revenue, page F-21

 1. We
                                         acknowledge your response to prior comment 1 and your October 30, 2020 response to comment
                                         2 from our September 10, 2020 letter. Please address the following:

 ● Provide
                                         us a more complete explanation as to why the required post-sale services you identify
                                         are immaterial in the context of the contract. In your response tell us why the following
                                         factors are not indicative that these services are material in the context of the contract:

 o Your
                                         obligation to provide these services for apparent periods of up to the over 20 years
                                         renewal terms of the underlying insurance policies appears to be a significant commitment;
                                         and

 o The
                                         fact that renewal commissions are deferred and paid when the underlying policies are
                                         renewed instead of at policy issuance appears to indicate that your insurance company
                                         customers expect the continued performance of these post-sale services;

 ● Assuming
                                         that you can support that your post-sale services are immaterial in the context of the
                                         contract, tell us why you believe that the required services being completed after the
                                         performance of your single performance obligation are administrative in nature comparable
                                         to the set-up activities identified in ASC 606-10-25-17 when these activities appear
                                         to transfer a service to your insurance company customers that they would have to perform
                                         for their policyholders had they not contracted with you to perform them as an intermediary.

 ● Assuming
                                         that you can support that your post-sale services are immaterial in the context of the
                                         contract and that these activities do indeed transfer services to your customers, as
                                         previously requested, please:

 o Tell
                                         us the amount of costs to provide these services that should have been accrued under
                                         ASC 606-10-25-16A at:

 ▪ January
                                         1, 2018 adoption of ASC 606;

 ▪ December
                                         31, 2018;

 ▪ December
                                         31, 2019; and

 ▪ now
                                         September 30, 2020; and

 o Provide
                                         us your analysis under SAB 99 as to whether this under accrual is material.

With
regard to the conclusion that the post-sale services are immaterial in the context of the contract and administrative in nature,
the Company respectfully advises the Staff that the conclusion is based on 1) the nature of the work required to perform; 2) the
reason for deferral of renewal commission payments by the insurance companies; and 3) the cost and time required to complete such
service.

Nature
of the work required to perform:

 o Although
                                         the Company is required to provide the post-sale services as mentioned in comment 1 in
                                         the response letter dated November 25, 2020, over the entire terms of the policies, the
                                         nature and effort of these activities are related to practically administrative activities.
                                         The following extracted contract term reflects the explicit requirement related to post-sale
                                         services, after the initial sale of insurance. Such service is limited to, if any, answering
                                         general questions arising from policyholders, collecting relevant documents from policyholders,
                                         which are prepared by the policyholders themselves, and then delivering them to insurance
                                         companies. However, the Company is not required to nor as a practice perform any checking
                                         on the information for authenticity or validation of the information before submitting
                                         to the insurance companies.

In
respect of initially issued policies, Party B (the Company) shall, on behalf of Party A (the insurance company), answer general
questions of policyholders, collect all documents and materials related to issuance of a policy, policy change, contact information
update and/or claim application forms and relevant documents from policyholders and/or the designated beneficiary, then deliver
them to Party A within [...] working days after receipt of the relevant documents and materials.

    2

The
Company believes the aforementioned post-sales services are administrative in nature. When determining whether these activities
constitute a contractual promise to the customer, the Company considered whether such services represent a transfer of service
to the customer (i.e., insurance company). Although the Company cannot avoid from undertaking the above administrative activities
to fulfill a contract, the completion of such activities does not result in a transfer of services to the customer. It is a customary
business practice in the insurance brokerage industry to provide these post-sales activities to optimize the user experience.
Accordingly, based on paragraph ASC 606-10-25-17, none of these activities on their own would result in a transfer of a good
or services to the insurance company. Doing so could however benefit the Company as it creates contact opportunities to promote
other products to the policyholders. As such, the Company does not believe that those administrative services represent a performance
obligation in its insurance brokerage service agreement. The Company also considers that there is similarity to the examples illustrated
within FASB Transition Resource Group for Revenue Recognition ("TRG") reference 12 published on January 26, 2015, in
which promised customer hotline services closely align as fulfilment activities, rather than additional promises in the contract.

 o There
                                         is no implied commitment outside of the written agreement. As responded in the previous
                                         response letters, the Company additionally facilitates the renewal process by reminding
                                         policyholders of the upcoming renewal. In fact, the policyholder is obliged to pay renewal
                                         premium at each payment due date under the contract with the insurance company. Such
                                         renewal payment is transacted through direct debit to the specified bank account of the
                                         policyholder when the policy was initially set up. The Company's reminder to policyholders
                                         regarding the upcoming renewal is, however, a supplement to the insurance companies'
                                         payment reminder to the policyholders. The Company has also considered whether the post-sales
                                         services provided value, from the insurance companies' perspective. For example, there
                                         are little directives from insurance companies in terms of how the post-sale services
                                         should be conducted. Further, when there is a complaint from a policyholder on the services
                                         of the Company, the insurance companies generally refer such information to the Company
                                         to handle. There are no oversights or monitoring mechanism from insurance companies to
                                         the Company on how such matters are resolved. There are also no penalties or deduction
                                         on the trail commission which results from customer dissatisfaction. A policyholder's
                                         satisfaction on these post sales services, due to its insignificant nature, generally
                                         would not be the main driver of the policyholder's decision to renew the policy. In this
                                         regard, the Company's performance of the post-sale services has no distinct identifiable
                                         benefit to its insurance company customers.

 o For
                                         all policies issued by the insurance company, including policies sold by itself and by
                                         an intermediary company, such as the Company, the insurance company undertakes the principal
                                         responsibility to provide such post-sale activities after the initial issuance of insurance
                                         policies. Even for those policies sold by the Company, the insurance company has conducted
                                         the activity of reminding upcoming renewals through systemically sending notifications
                                         via text messages. In addition, given the other stated situations (e.g., collecting contact
                                         information updates, answer inquiries from policyholder etc.) happen infrequently, limited
                                         efforts are needed. As such, from commercial standpoint, these activities do not represent
                                         a distinct service that insurance company would purchase. The Company's assessment of
                                         the nature of these post-sale services and its conclusion that performance of these post-sale
                                         services do not transfer a good or service to its insurance company customers is consistent
                                         with TRG reference 25, Topic 1, published on March 30, 2015.

    3

The
reason for deferral of renewal commission payment by the insurance companies:

 o Upon
                                         establishing an agency contract between the Company and the insurance company customer,
                                         the Company agrees to provide a service of selling insurance products on behalf of the
                                         insurance company and the insurance company agrees to pay sales commissions in exchange
                                         for the brokerage services. Although the post-sale services are included in the commission
                                         agreement, performance of such activities are not viewed as distinct service deliverables
                                         by the insurance company customers, but rather to supplement the brokerage services,
                                         as explained above.

 o Once
                                         the insurance policies are sold, the Company does not have any ongoing obligation
                                         to provide additional selling or remarketing services to insurance companies to secure
                                         policy renewals. The policyholders, upon the initial issuance of policies, are obliged
                                         to pay annual premiums over the term of insurance policies in exchange for the service
                                         of being insured by insurance companies; which is the entities that are taking underwriting
                                         risks and benefiting from receipt of annual premiums from policyholders. As a result,
                                         the agreed selling commissions that the Company is entitled to be paid by its insurance
                                         company customers represent a consideration in exchange for the promised insurance selling
                                         services on initial sales of new policies.

 o The
                                         Company considers the renewal commission, renewal compensation and renewal bonus are
                                         deferred payment mechanism for the Company's services of successfully selling the insurance
                                         products. The renewal commission and renewal bonus are generally paid within the first
                                         5 years after the sales of the long-term insurance policy and the renewal compensation
                                         are paid ratably throughout the policy period. It is a common industry practice that
                                         insurance companies do not pay all insurance intermediary commissions before receipt
                                         of renewal premiums from the policyholders so that i) to manage operating cash flow pressure
                                         and capital requirements and ii) to mitigate economic uncertainty and downside risks
                                         of non-renewal by the policyholders. Particularly, in China, life insurance business
                                         remains in its development stage where rules and regulations continue to evolve as well
                                         as purchasers' unsettled interests over the types of products. The insurance companies
                                         pay renewal commissions to the Company on a deferred basis is consistent with industry
                                         common practice. This payment arrangement is to prevent the insurance companies from
                                         1) having significant adverse impact on its cash flows, whereby advance payment of renewal
                                         commissions will significantly increase its cash and capital requirements to conduct

United States securities and exchange commission logo
December 23, 2020
Peng Ge
Chief Financial Officer
Fanhua Inc.
27/F, Pearl River Tower
No. 15 West Zhujiang Road
Guangzhou, Guangdong 510623
People's Republic of China
Re:Fanhua Inc.
Form 20-F for the Fiscal Year Ended December 31, 2019
Filed April 29, 2020
File No. 001-33768
Dear Mr. Ge:
            We have reviewed your November 25, 2020 response to our comment letter and have the
following comments.  In some of our comments, we may ask you to provide us with information
so we may better understand your disclosure.
            Please respond to these comments within 10 business days by providing the requested
information or advise us as soon as possible when you will respond.  If you do not believe our
comments apply to your facts and circumstances, please tell us why in your response.
            After reviewing your response to these comments, we may have additional
comments.  Unless we note otherwise, our references to prior comments are to comments in our
November 12, 2020 letter.
Form 20-F for the Fiscal Year Ended December 31, 2019
Note to the Consolidated Financial Statements
Note 2: Summary of Significant Accounting Policies
(r) Revenue Recognition
Insurance agency services revenue, page F-21
1.We acknowledge your response to prior comment 1 and your October 30, 2020 response
to comment 2 from our September 10, 2020 letter.  Please address the following:
•Provide us a more complete explanation as to why the required post-sale services you
identify are immaterial in the context of the contract. In your response tell us why the
following factors are not indicative that these services are material in the context of

 FirstName LastNamePeng Ge
 Comapany NameFanhua Inc.
 December 23, 2020 Page 2
 FirstName LastNamePeng Ge
Fanhua Inc.
December 23, 2020
Page 2
the contract:oYour obligation to provide these services for apparent periods of up to the over
20 years renewal terms of the underlying insurance policies appears to be a
significant commitment; and
oThe fact that renewal commissions are deferred and paid when the underlying
policies are renewed instead of at policy issuance appears to indicate that your
insurance company customers expect the continued performance of these post-
sale services;
•Assuming that you can support that your post-sale services are immaterial in the
context of the contract, tell us why you believe that the required services being
completed after the performance of your single performance obligation are
administrative in nature comparable to the set-up activities identified in ASC 606-10-
25-17 when these activities appear to transfer a service to your insurance company
customers that they would have to perform for their policyholders had they not
contracted with you to perform them as an intermediary.
•Assuming that you can support that your post-sale services are immaterial in the
context of the contract and that these activities do indeed transfer services to your
customers, as previously requested, please:oTell us the amount of costs to provide these services that should have been
accrued under ASC 606-10-25-16A at:
January 1, 2018 adoption of ASC 606;
December 31, 2018;
December 31, 2019; and
now September 30, 2020; and
oProvide us your analysis under SAB 99 as to whether this under accrual is
material.
2.We acknowledge your response to prior comment 2 and your October 30, 2020 response
to comment 3 from our September 10, 2020 letter. In order to help us assess why your
variable consideration for trailing commissions estimated using the expected value
method is fully constrained until the actual renewals occur, please address the following
additional items:
•Provide us additional insight into why the fact that renewals are outside your control
and the broad range of possible outcomes fully limits your ability to make estimates
of variable consideration given the law of large numbers and that it seems that you
have significant policy activity. In your response, tell us the significance of the
difference between renewal commissions, renewal compensation and renewal
performance bonuses in making your estimate.
•Help us understand how you apply the expected value method in estimating renewal
rates and the amount of trailing commission variable consideration to which you
expect to be entitled. In your response tell us how you group the various insurance
products to make your estimate and explain how you assess each product type for
each insurance company customer.
•For each product grouping in the preceding bullet, tell us how long you have been

 FirstName LastNamePeng Ge
 Comapany NameFanhua Inc.
 December 23, 2020 Page 3
 FirstName LastName
Peng Ge
Fanhua Inc.
December 23, 2020
Page 3
collecting renewal information.
•Tell us whether you currently collect renewal commissions for policies issued prior to
2013 and from 2013 to 2016. If so, explain to us why you fully constrain this estimate
given the amount of renewal history you have under these policies.
•Tell us why you apparently cannot make a reasonable estimate of trailing
commissions variable consideration at least in the near term when, for example, you
disclosed in your second quarter of 2020 earnings call a 92% 30-month persistency
ratio and that the 25-month renewal rate exceeded 87%.
•For each of the product groupings identified in the fourth preceding bullet, tell us the
amount of trailing commission variable consideration expected under your
application of the expected value method for the next succeeding year as of January
1, 2018 (adoption of ASC 606), December 31, 2018 and December 31, 2019 and the
amount of actual renewal commissions received in that succeeding year. For example
and for clarification purposes, tell us the amount of renewal commissions you
expected to receive under the expected value method for 2018 in your January 1,
2018 assessment as well as the amount of actual renewal premiums received in 2018.
            You may contact Mark Brunhofer at (202) 551-3638 or Sharon Blume at (202) 551-
3474 with any questions.
Sincerely,
Division of Corporation Finance
Office of Finance

CORRESP
1
filename1.htm

November
25, 2020

VIA
CORRESPONDENCE

Mark
K. Brunhofer

Division of Corporation Finance

Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549

    Re:
    Fanhua
    Inc.

    Form 20-F for the Fiscal Year Ended December 31, 2019

    Filed April 29, 2020

    File No. 001-33768

Dear
Mr. Brunhofer:

This
letter sets forth the response of Fanhua Inc. (the “Company”) to the additional comments contained in the letter dated
November 12, 2020 from the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”)
relating to responses to the previous comments of the Staff regarding the Company’s annual report on Form 20-F for the fiscal
year ended December 31, 2019 (the “2019 Form 20-F”).

For
your convenience, we have set forth below each of the numbered comments of the Staff’s letter and the Company’s responses
thereto.

Form
20-F for the Fiscal Year Ended December 31, 2019

Notes
to the Consolidated Financial Statements

Note
2: Summary of Significant Accounting Policies

(r)
Revenue Recognition

Insurance
agency services revenue, page F-21

    1.
    We
    acknowledge your response to prior comment 2. Please tell us whether you accrue the costs of your post-sale administrative
    services upon policy effectiveness as required by ASC 606-10-25-16A. If not:

    ●
    Tell
    us why you have not done so;

    ●
    Tell
    us the amount of such costs that should have been accrued at:

    ○
    January
    1, 2018 adoption of ASC 606;

    ○
    December
    31, 2018;

    ○
    December
    31, 2019 and

    ○
    June
    30, 2020; and

    ●
    Provide
    us your analysis under SAB 99 as to whether this under accrual is material.

The
Company respectfully advises the Staff that as responded in the previous response letter dated October 30, 2020, the post-sale
administrative activities include reminding policyholders of the upcoming renewal, notifying policyholders of changes in terms,
if any, and/or notifying insurance companies of any updates to policyholders’ contact information. The sales agents engaged by
the Company who facilitated the sales of the insurance policy typically perform these post-sale administrative activities. The
Company has concluded that these activities represent administrative tasks in nature and do not constitute performance obligations
under ASC 606. Rather, it believes these are activities that the Company undertakes to set up and maintain a contract that do
not transfer a good or service to the customers consistent with paragraph ASC 606-10-25-17. While these activities are intended
to remind the policy holder to make a payment and renew their policy, the Company’s efforts in this regard primarily serve
to maintain relationships with the users of our platform and enable us to sell additional insurance products. Therefore, we do
not believe ASC 606-10-25-16A is applicable as we believe these administrative activities are performed mainly for the Company’s
benefit (to maintain policy holder relationships) and do not transfer a promised good or service to the customer.

    2.
    We
    acknowledge your response to prior comment 3. Please elaborate on why you fully constrain the trailing commission variable
    consideration. In your response reference for us, where appropriate, the authoritative literature you rely upon to support
    your position and tell us:

    ●
    Why
    you are in the early stages of developing your life insurance agency business when on page 35 you disclose that you entered
    this business in 2006 when you acquired three life insurance agencies and that these companies presumably had operations before
    this time.

    ●
    Why
    the up to over 20-year renewal term on many of the policies you sell apparently precludes you from making reasonable estimates
    of trailing commissions to be earned in the immediate future. In this regard, it appears that the operation of the constraint
    in ASC 606-10-32-11 recognizes in the transaction price for performance obligations already delivered the minimum amount of
    revenue not likely to reverse.

    ●
    In
    conjunction with the preceding bullet, why you apparently cannot make reasonable estimates of trailing commissions, at a minimum,
    over the next year or two and continue a rolling assessment of this variable consideration each year under the guidance in
    ASC 606-10-32-14.

    ●
    Whether
    you apply a higher standard in applying the variable consideration guidance in ASC 606-10-32-11 as your proposed disclosure
    indicates that you “cannot conclude it is highly probable that a significant reversal...of cumulative revenue will not
    occur” when the referenced standard includes only a probable notion.

    2

The
Company respectfully advises the Staff that when estimating the amount of variable consideration associated with potential trailing
commission(s) (i.e., the renewal commission, renewal compensation and renewal performance bonus) in accordance with ASC 606-10-32-5
to 32-9 using the expected value method, the Company determined that such estimates were constrained until the actual renewals
occur in accordance with paragraph ASC 606-10-32-12. Apart from what the Company has analyzed in the response letter dated October
30, 2020, the Company further elaborates on why it fully constrains the variable consideration associated with potential trailing
commission(s) as follows:

    ●
    Although
    the Company entered into the life insurance business in 2006 through the acquisition of three life insurance agency companies,
    the insurance companies with whom the Company partners, as well as the life insurance products sold on behalf of these customers,
    have evolved significantly over time. This is due, in part, to exponential growth in the life insurance market in China (life
    insurance premiums in the Chinese market have grown by 650.0% from RMB413.2 billion in 2006 to RMB3.1 trillion in 2019) as
    well as the industry facing a number of regulatory changes over the past decade. As a result, the Company has experienced
    significant changes to its product offerings and customer base and seen continual changes in consumer behavior. Consequently,
    the renewal data accumulated prior to 2016 (as further explained below) does not provide predictive value for estimating renewals
    on the portfolio of current life insurance products offered through us. The significant changes to our business include but
    are not limited to the following:

    Ø
    Changes
    in insurance products distributed: The life insurance products sold by the Company have changed significantly over time
    in response to actions taken by the Chinese regulators. In September 2016, the China Insurance Regulatory Commission (CIRC)
    promulgated certain regulations which required life insurance companies to discontinue selling certain short and medium term
    life insurance products or redesign existing products to comply with the new laws. As a result, the main insurance products
    offered through our platform have changed from normal term health and life insurance products (such as individual endowment
    life insurance) during earlier years, to universal life insurance and participating insurance products from 2013 to 2016;
    subsequently to critical illness insurance products and individual annuity products from 2017 to 2019; and most recently to
    individual whole life insurance products in 2020. These changes limit the Company’s ability to use the historical experience
    in its life insurance agency business prior to 2016 to predict future renewals (and any related trailing commission) because
    these products are not representative of the life insurance policies sold by the Company in recent years.

    Ø
    Changes
    to our customer base: The insurance companies that the Company partnered with during the period from 2006 to 2016 were
    largely smaller insurance providers, most of whom reduced their cooperation with the Company substantially and had no further
    sales activities with the Company after 2016. As noted above, the CIRC tightened regulations over the sale of short-term life
    insurance products in 2016. As a result, the Company stopped partnering with many of its existing customers and began partnering
    with other life insurance providers who specialize in long-term insurance products. The Company noted that four of its top
    five life insurance customers have changed from the aforementioned periods to recent years. These changes in the customer
    base further limit the Company’s ability to accurately predict future renewal patterns (and any related trail commission)
    of life policies sold by the Company in recent years.

    ●
    In
    addition to the Company having limited representative data that predicts renewal rates of its current mix of life insurance
    products and customers, the Company has observed various degrees of fluctuations in renewal rates over the last several years.
    The Company assessed the possible reasons for this and concluded that it may be caused by the products’ nature, policyholders’
    personal financial condition, or changes in consumer behavior as the result of the evolving insurance market in China, which
    are outside of the Company’s control.

    3

    ●
    The
    Company acknowledges the Staff’s comment in regard to making an estimate of the constraint in the immediate future (i.e.,
    in the next year or two). However, due to the high level of uncertainty relative to estimating renewals of life insurance
    products sold by the Company as outlined in our response letter dated October 30, 2020 and above, we cannot conclude that
    it is probable that a significant reversal in cumulative trailing commission revenue recognized will not occur until the uncertainty
    is resolved in accordance with ASC 606-10-32-11 (that is, under current circumstances, until the policy is actually renewed).

    ●
    The
    Company will continue to reassess its estimate of variable consideration in accordance with ASC 606-10-32-14 at the end of
    each reporting period by evaluating the guidance in ASC 606-10-32-11 through 32-12. In doing so, the Company will refine its
    estimate as its business further advances and more historical data that is predictive of future policy renewals for our current
    product offerings becomes available to us.

    ●
    The
    Company does not apply a higher standard in applying the variable consideration guidance in ASC 606-10-32-11 as the word “highly”
    was mistakenly used and will be removed in the revised disclosure.

    3.
    Regardless
    of the outcome of the preceding comment, please:

    ●
    Revise
    your proposed disclosure from prior comment 3 to remove the word “highly” from the phrase quoted in the last bullet
    of the preceding comment.

    ●
    Provide
    us proposed revised disclosure that indicates the amount of renewal premium trailing commissions received (or changes in trailing
    premium estimates recorded in prior periods) in each period as the adjustment of transaction price for performance obligations
    delivered in prior periods as stipulated in ASC 606-10-50-10b and 50-12A.

In
response to the Staff’s comment, the Company will remove the word “highly” from the proposed disclosure included
in prior response to comment #3, and also supplement the disclosure as stipulated in ASC 606-10-50-10b and 50-12A in notes to
the financial statements for the fiscal year ending December 31, 2020 as follows (the additions are marked in underline text and
deletions are marked in strikethrough text):

“For
the sales of long-term life insurance products, the Group is entitled to receive initial commission upon the effectiveness of
the insurance policy, and subsequent renewal commission, renewal compensation and renewal performance bonus when the policyholders
makes subsequent annual premium payments. The amount of initial commission, renewal commission, renewal compensation and renewal
performance bonus is computed based on the insurance premium paid multiplied by pre-agreed matrix.

    4

Renewal
commission, renewal compensation and renewal performance bonus related to life insurance policies represent variable consideration
which is contingent on future renewals of initial policies or whether the Group achieves its performance target typically measured
as retention rate of policyholders of an insurance company in a given year. When determining the transaction price including variable
subsequent renewal commission(s) related to each life insurance policy, the Group estimates the variable consideration by using
the expected value method and applying the variable consideration constraint. The Group cannot conclude it is probable that a
significant reversal in the amount of cumulative revenue recognized will not occur until the uncertainty associated with the variable
consideration is subsequently resolved because 1) the Group has limited history of selling its current life insurance products
and co-operating with its current customers such that the Group’s experience is of little predictive value in determining future
renewal(s) of long-term life insurance policies; 2) the occurrence of a renewal is outside the Group’s control and the estimate
of renewal rates is complex and requires significant judgement; 3) the estimate of variable consideration associated with policy
renewals has a broad range of possible consideration amounts; and 4) the contingency is not expected to be resolved for a long
period of time. Thus, revenue related to the contingent renewal commission, compensation and performance bonus are recorded when
it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur, typically, when a policyholder
pays a renewal premium to the insurance company, and the expiring policy is renewed.

...

Given
the revenue related to the contingent renewal commission, compensation and performance bonus is not recorded upon policy effectiveness
due to the variable consideration constraint, the Group thus recognizes revenue in subsequent reporting years when policyholders
pay renewal premium to insurance companies through which initial policies are subsequently renewed, and recognizes the corresponding
contract asset arising from a change in the estimate of variable consideration which is constrained.

The
balances of the Group’s contract assets arising from a change in an estimate of variable consideration which is constrained was
RMB37.1 million and RMB[  ] million as of December 31, 2019 and 2020, respectively.

During
the years ended December 31, 2018, 2019 and 2020, the amount of revenue recognized related to performance obligations satisfied
in a previous period, inclusive of changes due to estimates, was approximately RMB571.1 million, RMB782.1 million and RMB[  ] million,
respectively.”

*	*	*

    5

If
you have any additional questions or comments regarding the 2019 Form 20-F, please contact the undersigned at +86 8388 3033 or
our U.S. counsel, Ben James of Kirkland & Ellis, at +852 3761-3412.

Very truly
yours,

By: /s/
                                         Peng Ge

Name:  Peng
                                         Ge

Title: Chief
                                         Financial Officer

cc: David
T. Zhang, Esq., Kirkland & Ellis

  Ben
James, Esq., Kirkland & Ellis

6

United States securities and exchange commission logo
November 12, 2020
Peng Ge
Chief Financial Officer
Fanhua Inc.
27/F, Pearl River Tower
No. 15 West Zhujiang Road
Guangzhou, Guangdong 510623
People's Republic of China
Re:Fanhua Inc.
Form 20-F for the Fiscal Year Ended December 31, 2019
Filed April 29, 2020
File No. 001-33768
Dear Mr. Ge:
            We have reviewed your October 30, 2020 response to our comment letter and have the
following comments.  In some of our comments, we may ask you to provide us with information
so we may better understand your disclosure.
            Please respond to these comments within 10 business days by providing the requested
information or advise us as soon as possible when you will respond.  If you do not believe our
comments apply to your facts and circumstances, please tell us why in your response.
            After reviewing your response to these comments, we may have additional
comments.  Unless we note otherwise, our references to prior comments are to comments in our
September 10, 2020 letter.
Form 20-F for the Year Ended December 31, 2019
Notes to the Consolidated Financial Statements
Note 2: Summary of Significant Accounting Policies
(r) Revenue Recognition
Insurance agency services revenue, page F-21
1.We acknowledge your response to prior comment 2.  Please tell us whether you accrue the
costs of your post-sale administrative services upon policy effectiveness as required by
ASC 606-10-25-16A.  If not:
•Tell us why you have not done so;
•Tell us the amount of such costs that should have been accrued at:

 FirstName LastNamePeng Ge
 Comapany NameFanhua Inc.
 November 12, 2020 Page 2
 FirstName LastNamePeng Ge
Fanhua Inc.
November 12, 2020
Page 2
oJanuary 1, 2018 adoption of ASC 606;
oDecember 31, 2018;
oDecember 31, 2019 and
oJune 30, 2020; and
•Provide us your analysis under SAB 99 as to whether this under accrual is material.
2.We acknowledge your response to prior comment 3.  Please elaborate on why you fully
constrain the trailing commission variable consideration.  In your response reference for
us, where appropriate, the authoritative literature you rely upon to support your position
and tell us:
•Why you are in the early stages of developing your life insurance agency business
when on page 35 you disclose that you entered this business in 2006 when you
acquired three life insurance agencies and that these companies presumably had
operations before this time.
•Why the up to over 20-year renewal term on many of the policies you sell apparently
precludes you from making reasonable estimates of trailing commissions to be earned
in the immediate future.  In this regard, it appears that the operation of the constraint
in ASC 606-10-32-11 recognizes in the transaction price for performance obligations
already delivered the minimum amount of revenue not likely to reverse.
•In conjunction with the preceding bullet, why you apparently cannot make reasonable
estimates of trailing commissions, at a minimum, over the next year or two and
continue a rolling assessment of this variable consideration each year under the
guidance in ASC 606-10-32-14.
•Whether you apply a higher standard in applying the variable consideration guidance
in ASC 606-10-32-11 as your proposed disclosure indicates that you "cannot
conclude it is highly probable that a significant reversal...of cumulative revenue will
not occur" when the referenced standard includes only a probable notion.
3.Regardless of the outcome of the preceding comment, please:
•Revise your proposed disclosure from prior comment 3 to remove the word "highly"
from the phrase quoted in the last bullet of the preceding comment.
•Provide us proposed revised disclosure that indicates the amount of renewal premium
trailing commissions received (or changes in trailing premium estimates recorded in
prior periods) in each period as the adjustment of transaction price for performance
obligations delivered in prior periods as stipulated in ASC 606-10-50-10b and 50-
12A.
            You may contact Mark Brunhofer at (202) 551-3638 or Sharon Blume at (202) 551-3474
with any questions.
Sincerely,

 FirstName LastNamePeng Ge
 Comapany NameFanhua Inc.
 November 12, 2020 Page 3
 FirstName LastName
Peng Ge
Fanhua Inc.
November 12, 2020
Page 3
Division of Corporation Finance
Office of Finance

CORRESP
1
filename1.htm

October 30, 2020

VIA CORRESPONDENCE

Mark K. Brunhofer

Division of Corporation Finance

Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549

 Re: Fanhua Inc.

Form 20-F for the Fiscal Year Ended December 31, 2019

Filed April 29, 2020

File No. 001-33768

Dear Mr. Brunhofer:

This letter sets forth the response of Fanhua
Inc. (the “Company”) to the comments contained in the letter dated September 10, 2020 from the staff (the “Staff”)
of the Securities and Exchange Commission (the “Commission”) regarding the Company’s annual report on Form 20-F
for the fiscal year ended December 31, 2019 (the “2019 Form 20-F”).

For your convenience, we have set forth
below each of the numbered comments of the Staff’s letter and the Company’s responses thereto.

Form 20-F for the Fiscal Year Ended December 31, 2019

Notes to the Consolidated Financial Statements

Note 2: Summary of Significant Accounting Policies

(a) Basis of Presentation and Consolidation, page F-13

 1. On page 77 you indicate that your non-controlling interests relate to an entity in which you currently own only 44.7% of
the equity interests. It appears from the organization structure chart on page 59 that this entity is Fanhua Insurance Surveyors
& Loss Adjustors Company Limited. With a view towards explanatory disclosure to be added in future filings, please tell us
why it is appropriate to consolidate this entity when you do not have a majority ownership interest. Separately reference for us
in your response the authoritative literature you rely upon to consolidate this entity.

The Company respectfully confirms to the Staff that
it consolidated Fanhua Insurance Surveyors & Loss Adjustors Company Limited (“FHISLA”) of which it held 44.7% equity
interest.

    1

The Company advises the Staff that in 2015, the Company
completed its corporate restructuring relating to FHISLA, (formerly, “CNinsure Insurance Surveyors & Loss Adjustors Holding
Co., Ltd.”), or the FHISLA Restructuring, which operates the Company’s claims adjusting segment.

Prior to the FHISLA Restructuring, the Company owned
51.0% of the equity interests of FHISLA. The Company now owns 44.7% equity interests of FHISLA through one of the Company’s wholly-owned
subsidiaries, Guangdong Meidiya Investment Co., Ltd. (“Meidiya”), and remains as the largest equity interest holder.

The Company continues to hold control over FHISLA
pursuant to act-in-concert agreements signed on October 26, 2015, which will remain effective for as long as FHISLA is in operation,
until and only when all contracting parties agree to cease the agreement. The act-in-concert agreement was signed with each of
the two equity interest holders, Shenzhen Yuanqian Investment Partnership (Limited Partnership) and Shenzhen Longqian Investment
Partnership (Limited Partnership), hereinafter referred to as “Yuanqian” and “Longqian”, and two executive
officers and a supervisor of the claims adjusting segment. Meidiya, Yuanqian, Longqian, the two respective executive officers and
the supervisor each holds 44.7%, 7.4%, 5.0%, 5.7%, 2.3% and 3.9% equity interests of FHISLA, respectively. These parties together
hold 69.0% equity interests of FHISLA, which exceeds 2/3 of the voting rights of equity interest holders of the Company.

The act-in-concert agreements include the following
key terms:

 (1) The concerted action items under the agreements covers all the potential voting items in the shareholders meeting as stipulated
in FHISLA’s Articles of Association, including but not limited to:

 a. operating and investment plan,

 b. nomination and replacement of director and supervisor,

 c. approves of the annual budgets,

 d. profit distribution plans and loss remedy plan,

 e. approve any debt issuance or changes to the shareholder’s capital

 f. consolidation, merger, liquidation or dissolution,

 g. changes to the company’s article of association,

 h. other matters, etc.

 (2) The parties entered into the act-in-concert agreements need to reach a consensus of any proposed action items before voting
in the shareholders’ meeting of FHISLA. Any disagreements amongst the parties shall be ultimately be determined according to the
shareholder holding the highest equity interest percentage amongst the act-in-concert parties, which is Meidiya.

    2

When evaluating whether it’s appropriate to consolidate
FHISLA, the Company first considers that FHISLA is not a variable interest entity because none of the conditions in ASC 810-10-15-14
are met. Accordingly, the voting interest model is used to determine whether to consolidate FHISLA. The Company refers to ASC
810-10-15-8 which states,

“For legal entities other than limited partnerships,
the usual condition for a controlling financial interest is ownership of a majority voting interest, and, therefore, as a general
rule ownership by one reporting entity, directly or indirectly, of more than 50 percent of the outstanding voting shares of another
entity is a condition pointing toward consolidation. The power to control may also exist with a lesser percentage of ownership,
for example, by contract, lease, agreement with other stockholders, or by court decree”.

In concluding that the Company consolidates FHISLA,
the Company referred to ASC 810-10-15-22 by reference, to assess if the Company has controlling financial interest in FHISLA. The
act-in-concert agreements remain effective for as long as FHISLA is in operation, until and only when all contracting parties agree
to cease the agreement, and it is not terminable by FHISLA, ASC 810-10-15-22(a) is met. The Company holds 44.7% equity interests
in FHISLA, which provides the Company the right to receive income through dividends or as proceeds from the sale of its interest
that fluctuates based on the performance of the operations of FHISLA and the change in the fair value thereof. ASC 810-10-15-22(c)
is met. The Company further assesses the control criteria in ASC 810-10-15-22(b) and concluded it is met after considering that
it holds controlling power over decision-making in FHISLA through controlling the board of directors and the shareholder meeting:

 ● Control of the board of directors

According to paragraph 79 of FHISLA’s Articles of
Association, the board of directors consist of five directors, including the chairperson. Directors are nominated by shareholders,
and then voted and approved in the shareholders meetings. Three out of five directors are nominated by the Company since the restructuring
in fiscal year 2015 and through the date of this response letter. Board resolutions are reached by simple majority; accordingly,
the Company controls the board of directors.

The board of directors is the body that sets the
strategic decisions of FHISLA through its power to:

 ● prepare the FHISLA’s operating and investment plan;

    3

 ● prepare the annual budgets;

 ● prepare profit distribution plans and loss remedy plan

 ● Sets the plan for any debt issuance or changes to the shareholder’s
capital

 ● Prepare plan for consolidation, merger, liquidation, or dissolution,
etc.

which will be approved at the
shareholders meeting.

 ● Control of shareholder meeting through the equity ownership and act-in-concert agreements with other equity interests holders:

According to paragraph 41 and 42 of FHISLA’s Articles
of Association, the shareholder meeting is the body with supreme authority. The shareholder meeting has the right to:

a) determine the FHISLA’s operating and investment
plan;

b) nominate and replace directors and supervisors (nominated
by the shareholders) and determine their remuneration;

c) review and approve director reports; approve supervisor’s
reports, budgets, profit distribution plans and loss remedy plan;

d) vote on increase or decrease of registered capital;

e) approve the issuance of bonds;

f) decide on the transfer of shares to persons other
than shareholders;

g) decide on the merger, division, change of corporate
form, extension of operating period, dissolution, and liquidation; and

h) amend the articles of association.

According to paragraph 62 of the articles of association,
shareholders exercise voting rights in proportion to capital subscribed. Increase or reduction in registered capital, division,
merger, dissolution, change of corporate form, and amendment of the articles of association shall be concurred by shareholders
with more than 2/3 voting rights. Other than these situations, shareholder meeting resolution is effective if it is approved by
more than (including) half of the total number of shareholders and more than half of total voting rights.

According to the aforementioned act-in-concert agreement
signed on October 26, 2015, parties to the agreement agree not to delegate the voting rights to any third party, whether by commissioning
or trust, etc. Any disagreements amongst the parties shall ultimately be determined according to the shareholder holding the highest
equity interest holding amongst the act-in-concert parties, which is Meidiya. As such, Meidiya, through the act-in-concert agreements,
controls 69.0% voting rights in the shareholders meeting including the director nominations which is the governing body of the
Company.

    4

Accordingly, through Meidiya, the Company controls
more than 2/3 of the voting interests of FHISLA.

In response to the Staff’s comment, the Company
will add the following disclosure in the Form 20-F forepart and the notes to the consolidated financial statements for the fiscal
year ending December 31, 2020 as below (the additions are marked in underline text and deletions are marked in strikethrough text):

“In 2015, the Group entered into act-in-concert
agreements with 5 equity interest holders of Fanhua Insurance Surveyors & Loss Adjustors Company Limited (“FHISLA”)
and controls 69.0% of voting rights in aggregate. The act-in-concert agreements were effective from October 26, 2015 and will remain
effective for as long as FHISLA is in operation, until and only when all contracting parties agree to cease the agreement. Per
the act-in-concert agreements, all the disagreements will ultimately be determined by the shareholder of the highest shareholding
amongst the act-in-concert group in FHISLA, which is Guangdong Meidiya Investment Co., Ltd., one of the wholly-owned subsidiaries
of the Group. Accordingly, the Group controls 69.0% of voting rights in aggregate, which exceeds the 2/3 of the voting requirement
to pass all resolutions in shareholder meetings of FHISLA.”

Note 2: Summary of Significant Accounting Policies

(a) Basis of Presentation and Consolidation, page F-13

 2. You disclose that you do not recognize commission revenue before the receipt of the related premium because collectability
is not ensured until receipt. Please tell us why it is appropriate to use an “ensured” recognition threshold when ASC
606-10-25-1e indicates that collectability of substantially all of the consideration in a revenue arrangement is assessed under
a probable notion. Reference for us the authoritative literature your rely upon to support your accounting.

The Company respectfully advises the Staff that, the
insurance agency services revenue includes revenue arising from selling property and casualty (“P&C”) insurance products
and life insurance products to the general public on behalf of insurance companies. Under the terms of the contracts with the insurance
companies (our customers), the Company is entitled to receive an agent commission from the insurance companies based on the premium
paid by the insured for the related insurance policy sold. For life insurance agency, the Company is also entitled to a commission
when the insured renews the policy (i.e., makes their annual payments for an additional year of coverage). For P&C insurance
agency, the Company is not entitled to renewal commission.

    5

In evaluating whether a contract exists in accordance
with ASC 606-10-25-1, the Company determines whether it is “probable” that the Company will collect substantially all
of the commission that it is entitled to in exchange for providing the insurance agency services to its customers. The Company
does not use an “ensured” threshold when evaluating whether a contract exists in accordance with ASC 606-10-25-1(e).

In response to the Staff’s comment, the Company
will revise its disclosures to remove the reference that revenue is not recognized because collectability is not “ensured”
and make it clear that the Company recognizes commission revenue when its performance obligation is satisfied; that is, at the
point in time the policy is effective (i.e., when the sale occurs which happens to coincide with receipt of the initial premium
from the insured).

The Company’s accounting for commissions earned
on the renewal of life insurance products is discussed in the response to Staff’s comment No. 3.

The Company will revise the disclosures in Form 20-F
for the fiscal year ended December 31, 2020 as follows (the additions are marked in underline text and deletions are marked in
strikethrough text):

“Insurance agency services revenue

The Group derives agency revenue serving as
a sales agent to distribute various life insurance and property and casualty (“P&C”) insurance products on behalf
of the insurance companies.

For Insurance agency services
the sales of life insurance products, performance obligations are considered met and revenue is recognized at a point
in time when the services are rendered and completed, at the time an insurance policy becomes effective, that
is, when the signed insurance policy is in place and the premium is collected from the insured. The Group has met all the criteria
of revenue recognition when the premiums are collected by the Group or the respective insurance companies and not before, because
collectability is not ensured until receipt of the premium as the Group’s primary promise is the sales of policies
on behalf of insurance companies to the policyholders. While certain contracts include the promise to provide some post-sales administrative
services to policyholders on behalf of the insurance company, such as responding to the policyholder inquiries regarding coverage
terms, facilitating the renewal process and/or gathering information from the policyholder to assist the insurance companies to
update the contact information of the policy holder, the Group has concluded such services are administrative in nature and immaterial
in the context of the contract. Accordingly, the Group does not accrue any commission and fees prior to the receipt
of the related premiums no performance obligation exists after a policy becomes effective.”

    6

 3. You disclose that you recognize revenue at a point in time as no performance obligations exist after the insurance policy
was signed. As it is clear from disclosure on page 75 that 45.4% of your revenue increase in 2019 over 2018 is associated with
renewal commissions in your life insurance agency business, tell us why you do not recognize subsequent year commissions as variable
consideration subject to the variable consideration constraint under ASC 606-10-32-11. In your response, tell us whether:

 ● any policies automatically renew;

 ● a new policy is signed each year; and

 ● you are obligated to re-market or encourage existing policyholders
to renew.

Reference for us the authoritative literature
you rely upon to support your accounting.

The Company respectfully advises the Staff that
the Company disposed of its P&C insurance division in 2017, which was a strategic shift from a historically P&C focused
business to a life insurance focused business. In addition, for P&C insurance agency, if a policyholder elects to renew the
policy after its initial term, the Company is not entitled to a renewal commission. Therefore, the analysis below focuses on the
life insurance agency business only.

For the commissions earned on the sale o

United States securities and exchange commission logo
September 10, 2020
Peng Ge
Chief Financial Officer
Fanhua Inc.
27/F, Pearl River Tower
No. 15 West Zhujiang Road
Guangzhou, Guangdong 510623
People's Republic of China
Re:Fanhua Inc.
Form 20-F for the Fiscal Year Ended December 31, 2019
Filed April 29, 2020
File No. 001-33768
Dear Mr. Ge:
            We have reviewed your filing and have the following comments.  In some of our
comments, we may ask you to provide us with information so we may better understand your
disclosure.
            Please respond to these comments within 10 business days by providing the requested
information or advise us as soon as possible when you will respond.  If you do not believe our
comments apply to your facts and circumstances, please tell us why in your response.
            After reviewing your response to these comments, we may have additional comments.
Form 20-F for the Fiscal Year Ended December 31, 2019
Notes to the Consolidated Financial Statements
Note 2: Summary of Significant Accounting Policies
(a) Basis of Presentation and Consolidation, page F-13
1.On page 77 you indicate that your non-controlling interests relate to an entity in which
you currently own only 44.7% of the equity interests.  It appears from the organization
structure chart on page 59 that this entity is Fanhua Insurance Surveyors & Loss Adjustors
Company Limited.  With a view towards explanatory disclosure to be added in future
filings, please tell us why it is appropriate to consolidate this entity when you do not have
a majority ownership interest.  Separately reference for us in your response the
authoritative literature you rely upon to consolidate this entity.

 FirstName LastNamePeng Ge
 Comapany NameFanhua Inc.
 September 10, 2020 Page 2
 FirstName LastName
Peng Ge
Fanhua Inc.
September 10, 2020
Page 2
(r) Revenue Recognition
Insurance agency services revenue, page F-21
2.You disclose that you do not recognize commission revenue before the receipt of the
related premium because collectability is not ensured until receipt.  Please tell us why it is
appropriate to use an "ensured" recognition threshold when ASC 606-10-25-1e indicates
that collectibility of substantially all of the consideration in a revenue arrangement is
assessed under a probable notion.  Reference for us the authoritative literature your rely
upon to support your accounting.
3.You disclose that you recognize revenue at a point in time as no performance obligations
exist after the insurance policy was signed.  As it is clear from disclosure on page 75 that
45.4% of your revenue increase in 2019 over 2018 is associated with renewal
commissions in your life insurance agency business, tell us why you do not recognize
subsequent year commissions as variable consideration subject to the variable
consideration constraint under ASC 606-10-32-11.  In your response, tell us whether:
•any policies automatically renew;
•a new policy is signed each year; and
•you are obligated to re-market or encourage existing policyholders to renew.
Reference for us the authoritative literature you rely upon to support your accounting.
Note 12: Income Taxes, page F-42
4.In your income tax rate reconciliation on page F-45, the "other" category in 2019
represents 13.1% of the effective tax.  Please tell us the nature of any individual
reconciling item over 5% of your effective tax rate; if there are none, please tell us the
nature of the underlying amounts.  Provide us proposed revised disclosure to be included
in next year's Form 20-F that separately discloses each item over 5% of the effective tax.
See Rule 4-08(h)(2) of Regulation S-X.
            We remind you that the company and its management are responsible for the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action or absence of
action by the staff.
            You may contact Mark Brunhofer at 1-202-551-3638 or Sharon Blume at 1-202-551-
3474 with any questions.
Sincerely,
Division of Corporation Finance
Office of Finance

December 23, 2010

Mr. Peng Ge
Chief Financial Officer  CNInsure, Inc.  22/F, Yinhai Building No. 299  Yanjiang Zhong Road Guangzhou, Guangdong 510110 People’s Republic of China

 Re: CNInsure, Inc.    Form 20-F for the Year Ended December 31, 2009
Filed on May 7, 2010
 File No. 001-33768

Dear Mr. Ge:

We have completed our review of your fili ng and do not have any further comments at
this time.
Sincerely,

        G u s  R o d r i g u e z
Accounting Branch Chief

CORRESP
1
filename1.htm

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.

1

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:

2

2

“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:

3

3

    •

    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.

4

4

    •

    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:

5

5

    •

    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

CORRESP
1
filename1.htm

CORRESP

[Letterhead of CNinsure Inc.]

November 10, 2010

VIA EDGAR

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 acknowledges receipt by CNinsure Inc. (the “Company”) of the comments contained in
the letter dated November 3, 2010 from the staff of the Securities and Exchange Commission (the
“Staff”) regarding the Company’s annual report on Form 20-F for the year ended December 31, 2009
(the “2009 Form 20-F”).
The comments relate to the Staff’s request for clarification of our accounting
policy for the cancellation of options to purchase shares and for further details on
our internal controls and procedures.

The Company expects to submit responses to the Staff’s comments by November 24, 2010, and will
file Amendment No. 2 on Form 20-F/A to the 2009 Form 20-F, if necessary, in response to the Staff’s
comments after the Staff concludes its review.

If you have any additional questions or comments, please contact the undersigned at +86 20
6122-2777, or our U.S. counsel, Latham & Watkins, attention: David Zhang at +852 2912 2503. Thank
you.

Very truly yours,

/s/ Qiuping Lai

Qiuping Lai

President

    cc:

    Yinan Hu, Chief Executive Officer, CNinsure Inc.

Peng Ge, Chief Financial Officer, CNinsure Inc.

November 3, 2010

Mr. Peng Ge
Chief Financial Officer  CNInsure, Inc.  22/F, Yinhai Building No. 299  Yanjiang Zhong Road Guangzhou, Guangdong 510110 People’s Republic of China

 Re: CNInsure, Inc.    Form 20-F for the Year Ended December 31, 2009
Filed on May 7, 2010
 File No. 001-33768

Dear Mr. Ge:

We have reviewed your filing and have the following comments.  In our comments, we
ask you to provide us with information so  we may better underst and your disclosure.
 Please respond to this letter within te n business days by providing the requested
information or by advising us when you will provide the requested response.  Where a comment requests you to revise disclosu re, the information you provide s hould show us what the revised
disclosure will look like and identify the filing in which you intend to first include it.  If you do
not believe a comment applies to your facts a nd circumstances, please tell us why in your
response.  Please furnish us a letter on EDGAR under the form type label CORRESP that keys
your responses to our comments.
 After reviewing the information provided, we may raise additional comments and/or
request that you amend your filing.

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 purchas e 32,000,000 shares to your employees and
directors in November 2008.  Pl ease tell us if you account ed for the cancellation of

Mr. Peng Ge
CNInsure, Inc.           November 3, 2010 Page 2
 the 30,804,500 shares as a can cellation or a modificat ion and reference the
authoritative literature supporting your accoun ting treatment.  Please revise your
disclosures to clarify your accounting polic y for the cancellation and modification of
options to purchase shares.
 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 unders tanding 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 a ssess internal control o ver financial reporting?

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

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

How do you maintain your books and record s 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 record ed in accordance with US GAAP.

• If you do not maintain your books and r ecords in accordance with US GAAP, tell
us what basis of accounting you use and de scribe 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 conver sions and disclosures.

Who is involved in y our financial reporting?

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

• what role he or she takes in pr eparing your financial statements;
• what relevant education and ongoing trai ning he or she has had relating to US
GAAP;

Mr. Peng Ge
CNInsure, Inc.           November 3, 2010 Page 3
 • the nature of his or her contract ual or other relationship to you;
• whether he or she holds and maintains any professional designations such as
Certified  Public Accoun tant (US) or Certified Management Accountant; and
• about his or her professional experience, including experience in preparing and/or
auditing financial statements prep ared in accordance with US GAAP.

If you retain an accounting firm or an organiza tion to prepare your financial statements,
please tell us:

• the name and address of the acc ounting firm or organization;
• the qualifications of their employees who perform the services for your company;
• how and why they are qualified to prepare your financial statements;
• how many hours they spent last year performing these services for you; and
• the total amount of fees you paid to each accounting firm or organization in
connection with the preparation of your fi nancial statements for the most recent
fiscal year end.

If you retain individuals who are not your  employees to prepare your financial
statements, without providing us with their names, please tell us:

• why you believe they are qualified to prepare your financial statements;
• how many hours they spent last year performing these services for you; and
• the total amount of fees you paid to each individual in connection with the
preparation of your financial statements  for the most recent fiscal year end.

 We urge all persons who are responsible for th e accuracy and adequacy of the disclosure
in the filing to be certain that the filing include s all information the Securities Exchange Act of
1934 and all applicable Exchange Act rules requir e.  Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.      In responding to our comments, please provi de a written statement from the company
acknowledging that:
• the company is responsible for the adequacy an d accuracy of the disclo sure in the filing;
• staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and
• the company may not assert staff comments as  a defense in any proceeding initiated by
the Commission or any person under the federa l securities laws of  the United States.

Mr. Peng Ge
CNInsure, Inc.           November 3, 2010 Page 4
 You may contact Ibolya Igna t, Staff Accountant at (202)  551-3656, or Gus Rodriguez,
Accounting Branch Chief, at (202) 551-3752 if you have questions regarding these comments.
In this regard, do not hesitate to contact me, at (202) 551-3679.

Sincerely,

Jim B. Rosenberg
Senior Assistant Chief Accountant

CORRESP
1
filename1.htm

Acceleration Request Letter dated on November 20, 2009

 CNinsure Inc.

 21/F, Yinhai Building

 No. 299 Yanjiang Zhong Road

 Guangzhou, Guangdong 510110

 People’s Republic of China

 +86 20 6122-2777

 November 20, 2009

 VIA EDGAR CORRESPONDENCE

 Securities and Exchange Commission

 Division of
Corporation Finance

 100 F Street, N.E.

 Washington, DC 20549-7010

Re:
CNinsure Inc.

 Registration Statement on Form F-3,

 as filed on November 5, 2009 (File No. 333-162895) and as
amended on

 November 19, 2009

 Ladies and Gentlemen:

 Pursuant to Rule 461 of the General Rules and Regulations
under the Securities Act of 1933, as amended, the undersigned, CNinsure Inc. (the “Registrant”), hereby requests acceleration of the effective date of the Registration Statement referred to above so that it may become effective by
10:00 a.m. eastern time on November 24, 2009. Please send a copy of the written order from the Securities and Exchange Commission (the “Commission”) verifying the effective time and date of the Registration Statement to our
counsel, Latham & Watkins, Attention: David Zhang, by facsimile at +(852) 2522-7006. Mr. Zhang’s direct line is +(852) 2912-2503.

 The Registrant acknowledges the following:

•

 should the Commission or its staff, acting pursuant to delegated authority, declare the filing effective, it does not foreclose the Commission from
taking any action with respect to the filing;

•

 the action of the Commission or its staff, acting pursuant to delegated authority, in declaring the filing effective, does not relieve the Registrant
from its full responsibility for the adequacy and accuracy of the disclosure in the filing; and

•

 the Registrant may not assert the declaration of effectiveness as a defense in any proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

 We appreciate your assistance in this matter.

Sincerely yours,

CNinsure Inc.

By:

 /s/ Yinan Hu

Name:

Yinan Hu

Title:

Chairman and Chief Executive Officer

CORRESP
1
filename1.htm

Correspondence

41st Floor, One Exchange Square

8 Connaught Place, Central

Hong Kong

Tel: +852.2522.7886 Fax: +852.2522.7006

www.lw.com

 FIRM / AFFILIATE OFFICES

Abu Dhabi

Munich

Barcelona

New Jersey

 November 19, 2009

Brussels

New York

Chicago

Orange County

 VIA EDGAR AND BY HAND

Doha

Paris

Dubai

Rome

 Mr. Jeffrey Riedler, Assistant Director

 Mr. John L. Krug, Senior Counsel

 Ms. Suzanne Hayes, Branch Chief

 Mr. Daniel Greenspan, Special
Counsel

 Division of Corporation Finance

 Securities and Exchange Commission

 100 F Street, N.E.

 Washington, D.C. 20549

Frankfurt

San Diego

Hamburg

San Francisco

Hong Kong

Shanghai

London

Silicon Valley

Los Angeles

Singapore

Madrid

Tokyo

Milan

Washington, D.C.

Moscow

Re:
CNinsure Inc.

 Registration Statement on Form F-3 Filed November 5, 2009

 File No. 333-162895

 Dear Mr. Riedler and Mr. Krug,

 On behalf of our client, CNinsure Inc., a company incorporated under the laws of the Cayman Islands (the “Company”), we are filing the Company’s Amendment No. 1 to Registration Statement on Form F-3 (“Amendment
No. 1”). For your ease of reference, we will hand-deliver to you 3 copies of Amendment No. 1 marked to show changes to the Registration Statement filed with the Commission on November 5, 2009.

 Set forth below is the Company’s response to the comment contained in the letter dated November 12, 2009 from the Staff. For your
ease of reference, the Staff’s comment is reproduced below.

 Selling Shareholders, page 47

1.
Please amend your filing to specifically describe the transaction(s) in which the shares (ADS’s) registered for resale were issued to the selling
shareholders.

 In response to the Staff’s comments, the Company has amended the referenced disclosure
under the caption “Selling Shareholders” on page 47 of Amendment No. 1.

 *    *    *

 Joseph A. Bevash

 Simon H.
Berry

 Kenneth D. C. Chan

 Stanley Chow

 Michael S. L. Liu

 Jane M. S. Ng

 John A. Otoshi

 Chun Fai Woo

 Cheung Ying Yeung

 Registered Foreign Lawyers:

 Patrick J. Flanagan (New York)

 Eugene Y. Lee (New York)

 David J. Miles (England and Wales)

 David Zhang (New York)

 If you have any additional questions or comments regarding Amendment No. 1, please
contact me at (852) 2912-2503 (work) or (852) 9124-8324 (mobile), Eugene Y. Lee (852) 2912-2515 (work) or (852) 9192-7430 (mobile) or Fan Zhang at (852) 2912-2506 (work) or (852) 9336-7411 (mobile).

 Very truly yours,

/s/ David T. Zhang

 David T. Zhang

 of
LATHAM & WATKINS

 Enclosures

cc:
Yinan Hu, Chairman and Chief Executive Officer

 Peng Ge, Chief Financial Officer

 Eugene Y. Lee, Esq., Latham & Watkins,
Hong Kong

 Fan Zhang, Esq., Latham & Watkins, Hong Kong

Mail Stop 4720
November 12, 2009
Mr. Yinan Hu Chairman and Chief Executive Officer CNinsure, Inc. 21/F, Yinhai Building No. 299 Yanjiang Zhong Road Guangzhou, Guangdong 510110 People’s Republic of China
Re: CNinsure, Inc.
  Registration Statement on Form F-3
Filed November 5, 2009
  File No. 333-162895

Dear Mr. Hu:

We have limited our review of your filing to those issues we have addressed in
our comments pertaining to the selling shareholders section of th e prospectus.  Where
indicated, we think you should re vise your document in response to these comments.  If
you disagree, we will consider your explanation as to why our comment is inapplicable or
a revision is unnecessary.  Please be as deta iled as necessary in your explanation.  In
some of our comments, we may ask you to provi de us with information so we may better
understand your disclosure.  After reviewing th is information, we may raise additional
comments.
Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure  requirements and to  enhance the overall
disclosure in your filing.  We look forward to  working with you in these respects.  We
welcome any questions you may have about our comments or any other aspect of our review.  Feel free to call us at the telephone numbers listed at the end of this letter.

Selling Shareholders, page 47

1. Please amend your filing to specifically de scribe the transaction(s) in which the
shares (ADS’s) registered for resale we re issued to the selling shareholders.

*  *  *  *  *

Mr. Yinan Hu CNinsure, Inc. November 12, 2009 Page 2
As appropriate, please amend your regist ration statement in response to these
comments.  You may wish to provide us with marked copies of the amendment to expedite our review.  Please furnish a cove r letter with your amendment that keys your
responses to our comments and provides any requested information.  Detailed cover
letters greatly facilitate our review.  Please understand that we may have additional comments after reviewing your amendmen t and responses to our comments.
We urge all persons who are responsible for the accuracy and adequacy of the
disclosure in the filing to be certain that the filing includes all in formation required under
the Securities Act of 1933 and that they have  provided all information investors require
for an informed investment decision.  Since the company and its management are in possession of all facts relating to a company’ s disclosure, they are responsible for the
accuracy and adequacy of the disclosures they have made.
Notwithstanding our comments, in the even t the company requests acceleration of
the effective date of the pending registration statement, it should furnish a letter, at the time of such request, acknowledging that:   ‚ should the Commission or the staff, acting purs uant to delegated authority, declare the
filing effective, it does not foreclose th e Commission from taking any action with
respect to the filing;
 ‚ the action of the Commission or the staff, acting pursuant to delegated authority, in
declaring the filing effective,  does not relieve the company from its full responsibility
for the adequacy and accuracy of the disclosure in the filing; and
 ‚ the company may not assert staff comments a nd the declaration of effectiveness as a
defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
  In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the staff of the Di vision of Corporation Finance in connection
with our review of your filing or in response to our comments on your filing.
We will consider a written request for acceleration of the effective date of the
registration statement as conf irmation of the fact that t hose requesting acceleration are
aware of their respective re sponsibilities under the S ecurities Act of 1933 and the
Securities Exchange Act of 1934 as they rela te to the proposed public offering of the
securities specified in the above registration statement.  We will act  on the request and,
pursuant to delegated authority, grant acce leration of the effective date.

Mr. Yinan Hu
CNinsure, Inc. November 12, 2009 Page 3
We direct your attention to Rules 46 0 and 461 regarding requesting acceleration
of a registration statement.  Please allow ad equate time after the filing of any amendment
for further review before submitting a request for acceleration.  Please provide this request at least two business days in a dvance of the requested effective date.
 If you have any questions, please call J ohn L. Krug, Senior Counsel, at (202) 551-
3862, Suzanne Hayes, Branch Chief, at (202) 551-3675, Daniel Greenspan, Special
Counsel, at (202) 551-3623, or me at (202) 551-3715.

     S i n c e r e l y ,         J e f f r e y  R i e d l e r       A s s i s t a n t  D i r e c t o r

cc: David T. Zhang, Esq.
     Latham & Watkins
     41
st Floor, One Exchange Square
     8 Connaught Place, Central      Hong Kong