China’s insurance regulator has released rules governing insurers’ investments in long-term home rental projects, opening up a new source of investment income.

According to a report by state media outfit Xinhua, the China Banking and Insurance Regulatory Commission (CBIRC) has allowed insurers to invest in long-term rental projects in large and medium cities, as well as areas with growing populations. These include the major cities of Beijing and Shanghai, as well as Xiongan New Area in Hebei Province.

The new rules, which took effect on May 28, present broader investment channels for insurance funds, and help with real estate controls, the CBIRC said in a statement.

The regulations outline that insurers can invest in both equity and debt. For the latter, cashflow of the entities being invested in should be sufficient to cover at least the amount of principal and interest of their debt payable. Meanwhile, for equity investments, insurance funds are prohibited from using the equity of the target projects as collateral to a third party.

The regulator will also fast-track the registration of insurance asset investments in long-term home rental projects, the statement said. The move is part of the government’s efforts to stabilise home prices and curb speculation through pro-rental policies.

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