Insurance and Trust's Final Stabilizers Welcome New Executives, Specialization Remains Key Factor (AI Translation)
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文｜财新 吴雨俭
By Wu Yujian, Caixin
【金融我闻/吴雨俭】日前，金融监管部门开启一轮局级干部轮换调整。与此同时，保险、信托两大行业保障基金的高管也迎来了新总裁人选。
[Finance News by Wu Yujian] Recently, financial regulatory authorities initiated a round of bureau-level cadre reshuffles. Simultaneously, the insurance and trust sectors' guarantee funds also welcomed new CEO appointments.
截至目前，信托业保障基金公司官网已更新了高管人员信息，显示张利为该公司党委副书记、拟任总裁；而保险保障基金公司的官网尚未变更。
As of now, the official website of the Trust Protection Fund Corporation has updated its executive information, showing Zhang Li as the company's Deputy Party Secretary and the proposed President. However, the official website of the Insurance Protection Fund Corporation has not yet made any changes.
保险保障基金和信托业保障基金分别被视为行业的“灭火器”“稳定器”，近年来随着保险行业和信托行业进入深度调整期，两大保障基金也在维稳化险、风险处置等方面发挥着重要作用。最新数据显示，截至2023年末，信保基金资产总额近1600亿元；截至2024年6月末，保险保障基金余额2431.09亿元。
Insurance Protection Fund and Trust Industry Protection Fund are respectively regarded as the industry's "fire extinguisher" and "stabilizer." In recent years, as the insurance and trust sectors have entered a period of deep adjustment, these two protection funds have played significant roles in maintaining stability and managing risks. According to the latest data, as of the end of 2023, the total assets of the Trust Protection Fund were close to 160 billion yuan; and as of the end of June 2024, the balance of the Insurance Protection Fund was 243.109 billion yuan.
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- Financial regulatory authorities have recently reshuffled bureau-level cadres and appointed new CEOs for the insurance and trust sectors' protection funds.
- As of 2023, the Trust Protection Fund's assets totaled nearly 160 billion yuan, while the Insurance Protection Fund's balance reached 243.109 billion yuan by mid-2024.
- Key executive changes include Guo Jing moving to the Insurance Protection Fund and Zhang Li returning to the Trust Protection Fund, with both sectors playing critical roles in industry stability and risk management.
The recent reshuffling of bureau-level staff in China’s financial regulatory system has seen new appointments in the insurance and trust sectors' guarantee funds. Zhang Li has been named Deputy Party Secretary and proposed as President of the Trust Protection Fund Corporation, whereas the Insurance Protection Fund Corporation is yet to update its leadership details on their official website [para. 1][para. 2].
These protection funds, acting as industry's "fire extinguisher" and "stabilizer," respectively, have played significant roles amid the deep adjustments in the insurance and trust sectors. As of the end of 2023, the Trust Protection Fund possessed assets close to 160 billion yuan, while the Insurance Protection Fund recorded a balance of 243.109 billion yuan by the end of June 2024 [para. 3][para. 4].
During a group interview at the 14th National People’s Congress in March 2024, Li Yunze, the head of the State Administration for Financial Regulation, affirmed China's robust financial risk resistance, citing total capital and provisions exceeding 50 trillion yuan in the banking and insurance industries, along with industry guarantee funds [para. 5].
According to Caixin, Guo Jing has been transferred to the Insurance Protection Fund Company to replace Zhang Li, who is returning to lead the Trust Industry Protection Fund Company. Guo Jing, aged 49, has had an extensive career in the insurance regulatory system since 2002, holding notable positions including Deputy Director of the Financial Accounting Department since 2016 [para. 6][para. 7].
Guo Jing’s appointment comes at a critical time, as the Insurance Protection Fund, considered the "last line of defense" for insurance companies, continues to aid policyholders and manage risks within the industry. The fund has been utilized in several key risk mitigation efforts, including takeovers of New China Life Insurance and Anbang Insurance Group, and most recently, it provided substantial capital injections into troubled insurance companies like Huaxia Life and Evergrande Life [para. 8][para. 9][para. 10].
In 2023, the Insurance Protection Fund notably increased its scale, despite significant expenditures, reflecting its strong capability to address financial instabilities. At the end of June 2024, the balance stood at 243.109 billion yuan, a substantial rise compared to the end of 2022 [para. 11][para. 12].
Contributing to this increase is the structural "price adjustment" of the Insurance Protection Fund, effective since December 2022, which altered fee mechanisms and expanded fund usage scenarios, particularly impacting life insurance companies [para. 13].
Zhang Li’s return to the Trust Industry Protection Fund as president is significant, as the trust sector undergoes a period of adjustment with declining non-standard product offerings, including real estate and government credit trusts. The Trust Protection Fund provides essential liquidity support and risk disposal mechanisms that stabilize the industry during such transitions [para. 14][para. 15].
Historically, the Trust Protection Fund has engaged in notable risk mitigation activities, including restructuring efforts with Huarong Trust and Anxin Trust. Completion of Anxin Trust's capital increase of 9 billion yuan in 2022 and Huarong Trust's equity restructuring in 2023 are key examples of the fund’s proactive role in stabilizing the trust industry [para. 16][para. 17][para. 18].
Looking ahead, the Trust Protection Fund plans to closely align with the National Financial Regulatory Administration’s core tasks, focusing on risk management, supporting industry reforms, and reinforcing system management. This includes continuing to improve corporate governance, enhance compliance, and strengthen corporate culture [para. 19][para. 20][para. 21].
In summary, the reshuffling and new appointments within China’s financial regulatory bodies underscore a strategic emphasis on robust risk management and industry stabilization amidst ongoing sectoral adjustments [para. 22][para. 23].
- Insurance Protection Fund Company
- The Insurance Protection Fund Company acts as the “last line of defense” for the insurance industry, providing non-governmental risk relief for policyholders and insurance companies. As of June 30, 2024, its balance stands at 2431.09 billion yuan. Recently, Guo Jing was appointed as the new president, succeeding Zhang Li who moved to the Trust Industry Protection Fund.
- Trust Industry Protection Fund Company
- The Trust Industry Protection Fund Company, seen as the sector's "fire department," plays a vital role in stabilizing and mitigating risks within the trust industry. It provides liquidity support, engages in risk asset disposition, and aids in the reorganization of high-risk trust institutions. As of the end of 2023, its assets total around 160 billion yuan, and its management efforts aim for high-quality industry-wide risk reduction and robust regulatory compliance.
- China United Insurance Holding Company Limited
- China United Insurance Holding Company Limited was among seven companies, including New China Life Insurance and Anbang Insurance, taken over by the Insurance Security Fund. The fund's interventions typically aim to stabilize and manage risks within the insurance sector, such as injecting capital or providing support for restructuring efforts.
- Sino Life Insurance
- Sino Life Insurance was one of the companies where the Insurance Protection Fund intervened. In 2022, the fund injected capital into Sino Life, estimated at around 31.25 billion yuan, holding a 17% stake. The fund continues to provide risk mitigation support, including financial subsidies, to manage the company's troubled assets.
- Huaxia Life Insurance
- Huaxia Life Insurance was among the insurance companies to which the Insurance Protection Fund provided risk mitigation funding in 2023, receiving an injection of 226 billion yuan. The company later transformed into a new entity named Ruizhongan Life. The Insurance Protection Fund currently holds 40% of Ruizhongan Life's equity.
- Tian An Life Insurance
- Tian An Life Insurance was among the companies where the Insurance Protection Fund intervened for risk mitigation. In 2023, the Fund injected 66.4 billion yuan into Tian An Life's new entity, Zhonghui Life, and currently holds 20% of its equity. Additionally, the Fund provides annual interest subsidies to help manage risk assets until they are fully resolved.
- Evergrande Life Insurance
- Evergrande Life Insurance is one of the problematic insurance companies that the Insurance Protection Fund has been involved in. In 2023, the fund injected 37.5 billion RMB into Evergrande Life's new entity, Haigang Life Insurance, and currently holds a 25% stake in it.
- RuiZhong Life Insurance
- RuiZhong Life Insurance is a new entity formed during the risk disposal of distressed insurance companies. The Insurance Protection Fund injected 226 billion CNY into RuiZhong Life, holding 40% of its shares. This move was part of a broader effort to stabilize and manage risks within the insurance sector.
- China Exchange Life Insurance
- The article does not provide specific information about China Exchange Life Insurance. However, it mentions several insurance companies like New China Life, China United Insurance, Anbang Insurance, Sinatay Life, Huaxia Life, Tianan Life, and Evergrande Life, which have received funding or risk mitigation support from the Insurance Guarantee Fund.
- Harbor Life Insurance
- Harbor Life Insurance, previously known as Evergrande Life Insurance, received an injection of 37.5 billion yuan from the Insurance Protection Fund in 2023 as part of risk resolution efforts. The fund currently holds a 25% equity stake in the company.
- Huarong Trust
- Huarong Trust completed a significant equity restructuring in February 2023. The Trust Protection Fund acquired 76.79% of Huarong Trust's shares for RMB 61.52 billion, resulting in China Huarong ceasing to hold any stake. The Fund has played a critical role in stabilizing and managing associated risks.
- Sichuan Trust
- Sichuan Trust is mentioned as one of the high-risk trust institutions facing risk disposition. The Trust industry entered a deep adjustment period, with non-standard products like real estate and government trust products being scaled down significantly, impacting its revenue streams.
- Anxin Trust
- Anxin Trust, now renamed Jian Yuan Trust, completed a 90 billion yuan capital increase at the end of 2022. Shanghai Di'an Investment Management Co. became its controlling shareholder. The Trust Industry Protection Fund acquired a 26.6% stake in Anxin Trust through judicial disposal. The fund's involvement ensured a smooth reorganization process.
- Xinhua Trust
- Xinhua Trust was mentioned in the context of risk disposal, where the Trust Industry Protection Fund has played a significant role. The Trust Industry Protection Fund has supported the restructuring of high-risk institutions like Xinhua Trust, contributing resources to tackle industry risk assets.
- New Era Trust
- New Era Trust is one of the entities involved in risk disposal, supported by Insurance Protection Fund in 2023. The fund invested approximately 330 billion yuan into new entities including New Era Trust, obtaining 20% of its equity.
- Jianyuan Trust
- Jianyuan Trust, formerly known as Anxin Trust, underwent a 90 billion RMB capital increase and was renamed under the leadership of the Shanghai state-owned investor, Shanghai Dian Investment Management Co. The Trust Fund acquired a 26.6% stake in Jianyuan Trust through judicial disposal.
- February 11, 2022：
- China Banking and Insurance Regulatory Commission (CBIRC) publicly solicited opinions on the 'Measures for the Administration of Trust Industry Protection Fund and Liquidity Mutual Assistance Fund (Draft for Solicitation of Comments)'.
- December 12, 2022：
- New version of 'Insurance Protection Fund Management Measures' came into effect.
- February 2023：
- Huarong Trust completed its equity restructuring, with the Trust Protection Fund acquiring 76.79% of Huarong Trust for 6.152 billion yuan.
- By the end of 2023：
- Total assets of the Trust Protection Fund reached nearly 160 billion yuan.
- March 2024：
- Li Yunze, Director of the State Administration for Financial Regulation, spoke at the 'Minister Passage' of the second session of the 14th National People's Congress.
- By the end of June 2024：
- The balance of the Insurance Protection Fund reached 243.109 billion yuan.
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