(Adds comments from company spokesman in paragraph 7 and 11)
SHANGHAI, May 18 (Reuters) - 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 risks”.
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)