New measures allow insurers to broaden investment options
By Feng Jianmin |
June 5, 2012, Tuesday
|
Print Edition
Print Edition
INSURANCE companies in China will be allowed to widen their investment options in bonds, property, infrastructure and overseas assets.
New measures will be unveiled to help the insurers contribute to the real economy and to encourage them to use premium income in a more market-oriented way, the China Insurance Regulatory Commission said in a statement on its website yesterday.
"We have amended or drafted more than 10 regulations," the CIRC said. "Some of the rules are nearly ripe for publication."
The CIRC will also adjust investment rules in the equity and property markets to "lower the insurers' excessive dependence on the capital market."
The regulator will also add more overseas markets, investment options and investment quota to enhance the assets of the insurers. They will also be able to invest more in infrastructure to better serve the economy, the statement said.
Other measures will also allow the insurers to conduct short selling and margin trading that can "create additional income" while they may be able to use derivatives in the future to help them hedge against stock market volatility, the CIRC said, without elaborating.
The CIRC released its statement amid a profit fall and slower growth faced by the Chinese insurers since last year.
Of the four listed insurers on the Chinese mainland, only Ping An Insurance posted a 4.3 percent annual rise in profit in the first quarter of this year. The profits of China Life Insurance Co slid 29 percent, New China Life shed 36 percent, and China Pacific Insurance Co tumbled 81 percent.
New measures will be unveiled to help the insurers contribute to the real economy and to encourage them to use premium income in a more market-oriented way, the China Insurance Regulatory Commission said in a statement on its website yesterday.
"We have amended or drafted more than 10 regulations," the CIRC said. "Some of the rules are nearly ripe for publication."
The CIRC will also adjust investment rules in the equity and property markets to "lower the insurers' excessive dependence on the capital market."
The regulator will also add more overseas markets, investment options and investment quota to enhance the assets of the insurers. They will also be able to invest more in infrastructure to better serve the economy, the statement said.
Other measures will also allow the insurers to conduct short selling and margin trading that can "create additional income" while they may be able to use derivatives in the future to help them hedge against stock market volatility, the CIRC said, without elaborating.
The CIRC released its statement amid a profit fall and slower growth faced by the Chinese insurers since last year.
Of the four listed insurers on the Chinese mainland, only Ping An Insurance posted a 4.3 percent annual rise in profit in the first quarter of this year. The profits of China Life Insurance Co slid 29 percent, New China Life shed 36 percent, and China Pacific Insurance Co tumbled 81 percent.
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