SHANGHAI, May 18 (Reuters) - Chinese insurer Foresea Life said its operations were running as normal and that its cashflow was stable, responding to reports its business faced risks amid a crackdown by Beijing on the financial markets.
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. China’s insurance regulator suspended Foresea Life from selling “universal life” products in December over issues managing customer accounts and information.
The regulator 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.
Local Chinese media and Britain’s Financial Times, citing a letter sent from Foresea Life to China’s insurance regulator, said the insurer may be unable to meet payouts if it was unable to sell new products.
The letter from Foresea Life, dated April 28, requested the China Insurance Regulatory Commission (CIRC) to resume new product approvals to “avoid inciting mass incidents by clients and localise and systemic risks”, the Financial Times said.
Foresea Life had been aggressively wresting market share from bigger, listed peers by offering investors guaranteed-return, higher yielding products.
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. (Reporting by Adam Jourdan; Editing by Richard Pullin)