China amends rules governing insurance relief fund

BEIJING (Reuters) – China’s financial regulator said on Wednesday it had amended rules governing a state-run bailout fund that bails out troubled insurers.

The regulations aim to promote the healthy development of the insurance industry, prevent and resolve financial risks, and maintain financial stability, the China Banking and Insurance Regulatory Commission said in a statement on its website. rice field.

The China Insurance and Security Fund, which played a key role in rescuing the bankrupt Anbang Insurance Group, is now allowed to participate in the development of risk management plans according to the new rules.

The regulation, jointly announced by the country’s central bank, banking and insurance regulator and the Ministry of Finance, will come into force from 12 December.

The company operates a relief fund that bails out policyholders and provides funds to liquidate troubled insurers. The funds will be used in other scenarios approved by the State Council, China’s cabinet, the rule said, but did not provide further details.

The world’s second-largest economy has slowed this year, hit by stringent COVID-19 regulations, a deepening property crisis and weakening demand. In response to the slowdown, regulators have vowed to curb financial risks.

Shareholders and management will also have to cooperate with the authorities in the process of liquidating the insurer with the help of the fund, the rule said.

The new rule also adapts the cap on the amount that insurers must surrender to cover the funds.

Reported by Ziyi Tang and Ryan Woo.Edited by Rashmi Aich

Our criteria: Thomson Reuters Trust Principles.

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