Exclusive: Regulator Removes Insurer’s Chair in Embezzlement Scandal

What’s new: China’s top insurance regulator has removed the chairman and a board member of J.K. Life Insurance Co. Ltd. from their positions in the wake of a fund embezzlement scandal, sources familiar with the issue told Caixin.

The China Banking and Insurance Regulatory Commission on Thursday announced the dismissal of the Beijing-based insurer’s Chairman Lu Changqing and board member Chen Yan, the sources said. The regulator may appoint a new chair of the insurer to stabilize operations, they estimated.

What’s the background: Lu is also chairman of the parent of the insurer’s biggest shareholder, privately owned aluminum giant China Zhongwang Holdings Ltd., while Chen is a Zhongwang board member.

Hong Kong-listed Zhongwang had allegedly embezzled tens of billions of yuan in insurance policy funds from J.K. Life since 2019, Caixin previously reported.

The insurance regulator directed J.K. Life to rectify its embezzlement misconduct within a certain period, but the company’s efforts to dispose of assets in order to gather funds failed to work as well as expected because of fallout from the Covid-19 pandemic among other factors, the sources said.

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Contact reporter Guo Yingzhe (yingzheguo@caixin.com) and editor Heather Mowbray (heathermowbray@caixin.com)

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