Top Chinese Insurers Fall Short of Top Marks for Corporate Governance
What’s new: The China Banking and Insurance Regulatory Commission (CBIRC) on Wednesday released the results of its first ever evaluation (link in Chinese) of insurers’ corporate governance. Several of the 10 major insurers evaluated got marks of “good,” but none earned the highest A grade, or “outstanding.”
The regulator attributed the fact that none of them received the highest grade to several factors, including poor management of stockholders’ equity, major shareholders’ excessive interference, weak internal risk controls, and lack of an effective long-term incentive and restraint mechanism.
The background: The evaluation is based on the measures (link in Chinese) to supervise and evaluate corporate governance of banks and insurers released by the CBIRC in November 2019, as part of regulator’s broader efforts to curb risks at financial institutions, in the wake of the first bank seizure by the state in 20 years.
The CBIRC said at the time that it would use the evaluation results as an important reference for taking regulatory measures, and enhance their use in assessing market access and onsite inspections.
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