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China to tighten regulation over insurance giants in draft guideline

China to tighten regulation over insurance giants in draft guideline

FILE PHOTO: The Chinese national flag is seen in Beijing, China April 29, 2020. REUTERS/Thomas Peter

BEIJING : China's banking and insurance watchdog issued a draft guideline on Friday aiming to improve its regulation over insurance group companies to prevent financial risks as the world's no.2 economy strives to recover from the impact of COVID-19.

China Banking and Insurance Regulatory Commission (CBIRC) is seeking public advice on the draft and the amendments it makes to a 2010 version of the rules regulating such companies.

The proposed changes include requiring insurance group companies to build a clear and transparent shareholding structure and set up mechanisms to alert potential contagious risks, according to a statement on the regulator's website.

It would also ask the insurance group companies to enhance oversight of their non-insurance subsidiaries and make disclosures accordingly.

The regulator would implement a "thorough, continuous and penetrating supervision" over insurance group companies to effectively prevent their operational risks with the draft rules, CBIRC said.

China has 12 insurance group companies including Ping An Insurance Group Co and Dajia Insurance Group Co., the revamped entity of embattled Anbang Insurance Group.

CBIRC is probing Ping An Insurance's investments in the property market, Reuters reported on Monday, citing two people with knowledge of the matter, after the firm took a big profit hit from a soured bet.

(Reporting by Ryan Woo, and Zhang Yan)

Source: Reuters

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