(Reuters) – China’s banking and insurance regulator on Tuesday issued new rules governing the risk management of insurance groups, which will strengthen supervision, limit the holding of non-core units and regulate their investments in other companies.
The move aims to limit risks in the sector and push insurance groups “to focus on their core business, strengthen their management of equity investments … and curb disorderly capital expansion,” he said. China Banking and Insurance Regulatory Commission.
The rules have been updated from a 2010 version to accommodate significant changes in the development of insurance groups over the years and in the external environment, the CBIRC added in a statement posted on its website announcing the changes.
China has tightened rules for its large systemically important financial institutions, including banks and financial holding companies, over the past two years to improve risk management in its financial system and reduce systemic risk.
The updated insurance group rules also aim to pave the way for the regulation of the country’s systemically important insurance companies, the CBIRC said in a separate statement also released on Tuesday.
China has 13 major insurance groups with total assets of 22 trillion yuan ($3.45 trillion) under management as of the end of 2020, dominating the insurance market, he said.