(Adds comments from company spokesman in paragraph 7 and 11)
SHANGHAI May 18 Chinese insurer Foresea Life
said its operations were running as normal and that its cashflow
was stable, following media reports that it has asked the
regulator to be allowed to resume selling some products to
enable it to meet redemptions this year.
The insurer, a unit of financial conglomerate Baoneng Group,
said in a statement late on Wednesday that its adequacy ratios,
reflecting its ability to make repayments, were higher than
regulatory requirements. Liquidity indicators for the year ahead
were within reasonable and safe levels, it said.
China has been cracking down on risk in the financial
markets. Its insurance regulator suspended Foresea Life from
selling "universal life" products in December over issues
managing customer accounts and information.
The China Insurance Regulatory Commission (CIRC) also banned
the firm's chairman, Yao Zhenhua, from the insurance business
for 10 years in February, citing violations of regulations in
its usage of insurance funds.
In a copy of a letter purportedly from Foresea Life to the
China Insurance Regulatory Commission (CIRC) circulating on
Chinese social media and reported by local and overseas media,
Foresea told the insurance regulator to resume new product
approvals to "avoid inciting mass incidents by clients and
localised and systemic risks".
The letter, dated April 28, added that Foresea expected 60
billion yuan ($8.70 billion) of redemptions this year, and asked
the CIRC to quickly reinstate sales of its universal insurance
products to help raise its cash flow levels.
A Foresea Life spokesman told Reuters the company was not
authenticating the letter, adding that the person who had sent
images of it to various media was out to "create more financial
Reuters was unable to independently verify the authenticity
of the letter.
The insurance regulator could not immediately respond to a
request for comment.
Foresea Life's statement, which did not mention the letter,
said: "Currently our firm's operations are normal and cash flow
is stable. Our business dealings with clients and partners
remain good and stable."
While reiterating the company's cash flow is stable, the
spokesman told Reuters he has no knowledge whether there are
fresh redemption requests.
Foresea Life had been aggressively wresting market share
from bigger, listed peers by offering investors
guaranteed-return, higher yielding products. Baoneng has been
involved in a bruising takeover battle of China Vanke
, the nation's No.2 homebuilder by sales.
The crackdown on the insurance market follows what the CIRC
has called risky activities by some aggressive insurers,
particularly those engaged in stock market speculation.
($1 = 6.8943 Chinese yuan renminbi)
(Reporting by Adam Jourdan; Editing by Muralikumar Anantharaman
and Elaine Hardcastle)