China Throws Insurers Lifeline as Falling Rates Squeeze Returns

China has relaxed a key investment rule for insurance companies to ease their compliance burden, as a prolonged drop in interest rates threatens their ability to cover future payouts.

The financial regulator dropped a draft mandate requiring insurers to closely match the lifespans of their investments with their liabilities. Instead, final rules issued last week adopt a more flexible “hedging ratio” to measure how well firms are buffered against rate fluctuations.