China issues new rules for insurance groups

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China issues new rules for insurance groups

BEIJING - China's banking and insurance regulators have issued new rules for the risk management of insurance groups, which will step up supervision, limit holdings of non-core units and regulate their investments in other companies on Tuesday.

The move is intended to curb risk in the sector, and to encourage insurance groups to focus on core business, strengthen equity investment management and curb disorderly expansion of capital, the China Banking and Insurance Regulatory Commission CBIRC said.

The rules were updated from a 2010 version to adapt to the changes in the development of insurance groups over the years and the external environment, CBIRC said in a statement on its website.

In the past two years, China has been toughening rules for its big and systemically important financial institutions, including banks and financial holding firms, to improve risk management in its financial system and curb systemic risk.

The CBIRC said in a separate statement released on Tuesday that the updated rules for insurance groups are intended to paving the way for the regulation of country's systemically important insurance companies.

China has 13 large insurance groups with a total asset of 22 trillion yuan US $3.45 trillion under management as of end 2020, dominating the insurance market, it said.