CIRC to Ease Limits on Insurers’ Investments in China

Posted by Reading Time: < 1 minute

May 31 – The China Insurance Regulatory Commission (CIRC) will ease limits and relax some rules on investments made by insurance companies in stocks and bonds, but caution remains on property investments, according to a CIRC official statement.

“We are in discussions to allow major insurers to invest 20 percent of their assets into stocks and equity funds, and increase their investments in unsecured bonds to 20 percent from 15 percent,” Sun Jianyong, head of CIRC’s capital management department, told China Daily.

Industry insiders said the new rules may bring about US$1.5 billion of capital into China’s stock market. According to CIRC data, the premium revenue of insurers increased by 13.8 percent to RMB1.1 trillion last year, with total assets reaching RMB4.1 trillion.

According to Sun, detailed rules regarding property investment may still take some time to finalize. However, insurers would still not be allowed to invest in residential buildings or be involved during the property development stage, said Wu Dingfu, chairman of the CIRC. Furthermore, insurers cannot make direct investments in the nation’s commercial property sector.