Quick Take: Insurance Watchdog to Beef Up Policing of Data Fabrication
China’s insurance regulator vowed to uproot the industrywide practice, especially among less-capitalized insurers, of fabricating and falsifying solvency data.
The China Insurance Regulatory Commission (CIRC) said it will conduct quarterly checks on the authenticity of solvency data that insurers submit. If needed, the CIRC will conduct on-site inspection of insurers’ solvency management practices and records.
Special attention will be focused on insurers that are nearly insolvent, as they appear to have more of an incentive to gloss over their ability to meet financial obligations, the CIRC said Friday. Insurers with a core solvency margin of less than 60% and a comprehensive solvency margin of less than 120% belong to this group.
Both core and comprehensive solvency margins measure the extra capital an insurer holds against unforeseen events or claims. The statutory minimum of these margins Chinese insurers are 50% and 100% respectively.
The CIRC since late April has issued a slew of policy documents and directives targeting improper industry practices. It aimed at cracking down on the practice of using insurance funds to make high-risk bets on stocks and structured products, buy properties or acquire overseas assets at inflated prices.
In May and June, the regulator demanded insurers conduct self-checks on the authenticity of their solvency data, uncovering more than 600 cases of “distortion,” said Guo Qing, deputy director of the CIRC’s financial accounting bureau, at a news conference in September.
Contact reporter Dong Tongjian (firstname.lastname@example.org)
- 1Cover Story: China Lines Up Yet More Aid for the Property Sector, But Will It Be Enough? (Part 1）
- 2Cover Story: China’s Housing Recovery Will Require Rebooting the Economy (Part 3)
- 3Cover Story: China’s Share Markets Back on the Fundraising Menu for Ailing Developers (Part 2)
- 4In Depth: U.S. Audit Row Dims Big Accounting’s Prospects in China
- 5China Targets Seniors in Renewed Covid Vaccination Drive
- 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