China in 2 minutes a day
Top news and analysis delivered to your inbox

Regulators target risk in insurance industry – China’s latest business and technology news

A
summary of the top news in Chinese business and technology for October 12, 2017. Part of the daily SupChina newsletter, a convenient package of China’s business, political, and cultural news delivered to your inbox for free. Subscribe here.
5 days ago
Lucas Niewenhuis

After “years of booming growth amid lax supervision,” the insurance sector is finally getting attention from China’s famously risk-averse administrators, Caixin reported on October 8. The magazine said, “Not a single license for a new insurer has been issued since April, compared to six issued in the first two months.” April, of course, is when it was announced that Xiang Junbo 项俊波 was being investigated for corruption at his post at the China Insurance Regulatory Commission (CIRC).

The CIRC has since drafted and begun to implement a number of measures to tamp down risk in the industry:

  • A set of rules went into effect on October 1 that are “expected to halt sales of some popular insurance policies that offered insurers quick access to funding but proved risky for investors.”
  • In August, the CIRC released a draft document that proposed to reduce how much a single shareholder in an insurance company can hold from 51 percent to 33 percent, and also restrict company fundraising activities.
  • On October 12, Caixin reported that the CIRC is also “soliciting opinions on a new draft guideline covering internal controls over the use of insurance funds,” which are expected to “establish an anti-corruption system aimed at curbing the transfer of illegitimate interests” by the end of this year.
  • Bloomberg reports that following HNA’s Bohai Life Insurance’s failure to properly report some transactions and meet regulatory requirements, the CIRC has issued a six-month ban on “direct and indirect transactions — including loans and financial aid” between it and other HNA companies.

By Lucas Niewenhuis
Lucas Niewenhuis is an associate editor at SupChina who helps curate daily news and produce the company's newsletter, app, and website content. Previously, Lucas researched China-Africa relations at the Social Science Research Council and interned at the Council on Foreign Relations in New York. He has studied Chinese language and culture in Shanghai and Beijing, and is a graduate of the University of Michigan.
China in 2 minutes a day
Top news and analysis delivered to your inbox

More from SupChina

In Shanghai, a modern twist on a traditional therapy: acupuncture for pets
An animal hospital utilizes traditional Chinese medicine to treat pets with debilitating ailments. Read more
Oct 16, 2017