Editorial: Government Must Act Fast to Stop Insurance Companies from Turning into Corporate Raiders

Insurance companies are at the center of a storm after the head of China's securities regulator, Liu Shiyu, pointed an angry finger at some players who had dipped into "improperly sourced funds" to raise their stakes in publicly traded blue-chip companies. Over the past year, some insurers have made aggressive equity investments, at times using highly leveraged funds borrowed from the public. The usually low-key regulatory czar recently took a biting swipe at such "robber barons," saying such actions have raised concerns about insurers' losing sight of their main mission, which is to build an investment portfolio that offers long-term stable returns and not exposing ordinary investors to grave financial risks. Such practices have also increased the risks of financial institutions — a vast majority of which are controlled by a single shareholder and plagued by weak corporate governance — of being hijacked to finance the expansion plans of their principal stakeholder.