China Insurance Regulator Sends Inspectors to Nine Firms
(Beijing) — China’s insurance regulator said it had sent inspectors to check on nine firms that had been singled out and censured earlier for failing to meet requirements on investment-linked policies.
The inspection marks the latest development in a crackdown the regulator launched this month on the abusive use of the policies by some companies to attract public investment.
The targeted companies include Foresea Life Insurance and Evergrande Life Insurance, which frequently made headlines this year for acquiring stakes in public companies. They were identified in a special examination conducted from May to August that focused on so-called universal policies, the China Insurance Regulatory Commission (CIRC) said Wednesday.
Universal policies, which first appeared in the United States, refer to a type of permanent life insurance that allows the policyholders maximum flexibility in making payments and deciding how much of the fund they want allocated to covering the cost of insurance and how much can be used for investments.
In China, however, the policies have morphed into a tool used by some private insurance companies to raise funds quickly and use them for their own investment purposes. The regulators said this created risk that the insurers cannot afford and disrupted the securities market when the funds were used to fund hostile takeovers of public companies.
The CIRC first named the nine companies when it banned Shenzhen-based Foresea from selling universal policies early in December. It said Foresea had failed to manage its universal policies separately from traditional policies and had not clearly accounted for their profits and losses.
The regulator said it also found problems with the other companies, but did not specify what they were.
All the firms had submitted a report to the CIRC on how they fixed the problems it identified, the regulator said on Wednesday. The inspectors were sent to review the results.
The announcement also shows the CIRC has required two insurers, Huaxia Insurance and Soochow Life Insurance, to stop selling policies online because they failed to properly verify the information of policyholders. This brings the number of insurers facing the restriction to seven. The two firms were also told they could not register any new products with the regulator for three months.
From January to November, the amount of investment-intended insurance premiums at Huaxia and Foresea accounted for more than 70% of their income from policy sales, according to the CIRC. The ratio for Evergrande was greater than 90%.
CIRC Chairman Xiang Junbo said in meeting two weeks ago that the regulator was working on developing new rules for universal policies, including lower ceilings on the returns they promise policyholders.
Contact reporter Wang Yuqian (firstname.lastname@example.org)
Oct 22 06:38 PM
Oct 22 06:26 PM
Oct 22 06:14 PM
Oct 22 06:07 PM
Oct 22 04:52 PM
Oct 22 01:34 PM
Oct 22 12:28 PM
Oct 22 12:22 PM
Oct 21 05:58 PM
Oct 21 05:49 PM
Oct 21 05:38 PM
Oct 21 04:07 PM
Oct 21 04:00 PM
Oct 21 12:20 PM
Oct 21 11:17 AM
- 1In Depth: China’s Anbang Salvage Operation Runs Aground
- 2Property Developers Lose Their Lust for Land
- 3China Unveils Major Revamp to Commercial Bank Law
- 4Exclusive: OKEx Suspends Cryptocurrency Withdrawals After Founder’s Arrest
- 5China State Firms’ Assets Grow Even as Government Presses for Lighter Debt
- 1Power To The People: Pintec Serves A Booming Consumer Class
- 2Largest hotel group in Europe accepts UnionPay
- 3UnionPay mobile QuickPass debuts in Hong Kong
- 4UnionPay International launches premium catering privilege U Dining Collection
- 5UnionPay International’s U Plan has covered over 1600 stores overseas