Insurance Group Allowed to Control 1 Financial Institution

Rules on the management of insurance groups were released by the China Insurance Regulatory Commission (CIRC), the top Chinese banking regulator, on March 24.

In detail, the rules involve insurance group's threshold, corporate management, capital management, information disclosure and supervision and the main tune is to focus on insurance and control risk. According to them, insurance groups and their subsidiaries in the Chinese market are allowed to invest in financial institutions including commercial banks but the total investment should not exceed 30 percent of the group's aggregate net assets. The proportion is not more than 10 percent provided that the target is non-financial institutions. Provided that main business of financial institutions invested by both an insurance group and its subsidiary is similar, then the number for the latter to take a majority stake in the former is only one.

Currently, China has eight insurance groups with net assets and premium revenue each accounting for over 75 percent of the nation's total.