China’s insurance regulator increases scrutiny of insurers

Watchdog zeroes in on new entrants to the industry in order to eliminate risk at the source

China’s insurance regulator increases scrutiny of insurers

Insurance News

By Gabriel Olano

The China Insurance Regulatory Commission (CIRC) has announced that it will further scrutinise the entry of new players into the Chinese insurance arena in order to defuse risks within the sector.

The CIRC said in a statement that it will increase its supervision of new insurance firms to ensure they adhere to their operations plans, to verify that the funding provided by their shareholders is authentic, and to prevent their stakes from being transferred during the companies’ preparatory process.

Additionally, the regulator will be stricter in evaluating the performance of insurers’ chairmen and other senior executives and will continue to push for improved regulatory compliance by firms, in order to build better corporate governance and prevent risks at the source.

In recent months, the Chinese government has regulated the insurance sector more tightly, initiating a crackdown on the illegal use of insurance funds and introducing efforts to keep the leverage ratio under control and eliminate regulatory loopholes.

According to Caixin, the move is part of the government’s mission to deleverage the entire financial sector of China and diffuse systemic risks created by several years of loose monetary policy.

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