China Insurance Regulatory Commission (CIRC) has vowed to "severely fight against" short-term speculation and malicious investment in listed companies.
While addressing the press at the State Council Information Office, Xiang Junbo, chairman of CIRC, highlighted risk control through strict regulation and supervision and the importance of encouraging the insurance industry to better serve social and economic development.
CIRC press conference at the State Council Information Office on February 22, 2017. /CGTN Photo
Xiang said that insurance should not be a “rich man’s club” and must not be abused by financial tycoons.
Addressing the risk control issue, Xiang stated: “If you are in the insurance industry, insurance regulatory rules have to be followed, and you have to shoulder the responsibility the insurance industry serves for the society, the real economy and its people.”
He went on to warn: “There is no room for you to challenge the bottom line of the supervisory departments, and damage the industry’s reputation, harm interests of the people, otherwise we will resolutely kick them out of the insurance industry.”
The watchdog said it will curb “aggressive” pricing and the “unreasonably” high returns of some insurance products, adding that insurers should not attempt to interfere in the management of listed companies.
CFP Photo
Some insurance companies bid aggressively for stakes in listed firms last year, in order to achieve high yields. Baoneng Group’s attempted to become Vanke’s largest shareholder and take control of the country’s real estate developer, with the necessary capital largely raised through universal life insurances and leveraged funding.
Xiang said that violations of law and regulations will be severely punished. The CIRC will increase its crackdown on illegal acts, putting “teeth” on regulatory forces.
Chen Wenhui, the vice chairman, said that the CIRC pays close attention to insurance companies who buy more than five percent of stocks of listed companies. He said that a series of intensified supervision and risk control measures have been implemented and illegal activities will be punished severely.
