BEIJING Dec 13 China's insurance regulator will
soon announce new rules to tighten control over insurance
companies' stock market investment activities, local media
The China Insurance Regulatory Commission (CIRC) is expected
to publish a new notice that will, for the first time, set some
boundaries for insurers' parties acting in concert when they
acquire public firms, Caixin reported, without specifying its
source of information.
The CIRC's new rules will require insurers' parties acting
in concert to apply for regulatory approval before acquiring
listed companies and their purchases must be funded by their own
capital, according to the Caixin report.
The regulator will also ban insurance firms from acquiring
public firms in concert with any non-insurance parties,
according to the report.
The move comes amid an intensifying regulatory crackdown on
risky activities by some aggressive players in the insurance
sector, particularly those seen to be engaging in financial
market speculation using expensive short-term funds.
Last week, CIRC suspended Evergrande Life, the insurance arm
of China Evergrande Group, from conducting stock
market investment, saying it was engaging in speculative,
frequent, high-volume trading.
It also said would soon send two inspection teams to check
compliance at Evergrande Life and Foresea Life, a unit of
financial conglomerate Baoneng Group. Both firms have been
actively engaged in stock market trading this year, sparking
criticism of their speculative activities using insurance funds.
In a meeting on Tuesday, CIRC Chairman Xiang Junbo warned
that insurers should be long-term money providers and not
short-term capital market "savages".
"Becoming a friendly player in capital markets should not
allow insurers to become hateful savages, and also should not
allow insurance capital to become a nightmare for capital
markets," he said.
If an insurer acquires more than 20 percent of a listed
company, the purchase would be considered by the insurance
regulator as a "major" stock investment, which would be subject
to more detailed information disclosure requirements, Caixin
(Reporting By Shu Zhang and Matthew Miller; Editing by