Anbang’s fall should serve as a serious warning for other Chinese insurers looking to take advantage of insurance sales to help fund asset acquisitions.
Chinese insurer's downfall serves as a reminder not to flout regulators' wishes, but it also reveals a lot about Beijing's attitude towards corporates it deems too important to fall.
The draft guidelines form part of the new C-Ross solvency system, to which insurers in China must adapt over the next three years. They include reviewing asset-liability management.
The country's life insurers are investing more into alternatives and equity to raise returns. Doing so comes with sizeable risks that smaller firms may struggle with, say experts.
China's insurance regulator has issued additional guidelines around private equity investment by insurers, as they build exposure to the asset class, both as GPs and LPs.
Beijing's regulatory crackdown on aggressive selling and investment practices is expected to lead to industry consolidation.
Yesterday the China Insurance Regulatory Commission issued a statement flagging what it sees as key risks for the industry, after admitting failing to properly address malpractice.
The investigation of the Chinese insurance regulator's chairman for alleged corruption has implications for domestic insurers' investments – notably larger deals.
It makes sense for Chinese regulators to restrict domestic insurance firms' aggressive moves into risk assets. Doing so should reduce market volatility and boost bond liquidity.
The mainland insurance watchdog is introducing new restrictions on insurers' equity investments, after the securities regulator slammed heavily leveraged takeovers.
Mainland insurance firms have been granted permission to buy Hong Kong stocks via the Stock Connect, a move that should spur more southbound trading and free up QDII quota.
Chinese insurance firms' assets soared last year thanks to a boom in high-cash-value policies, but they may struggle to meet these liabilities, say industry observers.