China's insurance sector is not a club for the rich and the regulator will strictly monitor the use of insurance capital and not allow speculators to exploit insurance regulations, the China Insurance Regulatory Commission said yesterday.
The CIRC will prioritize risk prevention and enhance supervision of insurance companies, insurance products and the use of capital, said Xiang Junbo, chairman of the commission.
The CIRC will seriously punish insurance companies that repeatedly violate risk management rules.
Measures will include banning the insurers from launching new services, penalizing senior managers and even revoking insurance license, Xiang said.
"We can never make the insurance sector a club for the rich people, and we won't allow financial speculators to take advantage of insurance regulations," Xiang emphasized.
CIRC Vice Chairman Chen Wenhui reiterated yesterday that insurance capital should be used prudently, serve the insurer's core business, and support the development of the real economy.
Insurance companies are encouraged to hold shares rather than take a controlling stake in another company, Chen said.
In the past few months, the regulator has enhanced risk prevention by limiting a single shareholder's stake in an insurance company at one third, suspending Internet business of seven insurance companies depending excessively on selling investment-type of products, and enhancing information disclosure requirements on investment in the stock market.
In November, the CIRC warned Evergrande Life Insurance over profiteering from short-term trading of stocks of four companies.
The CIRC last week demanded Kunlun Health Insurance Co to verify the ties between its shareholders to see if the company is actually controlled by the Guo Yingcheng family, owner of real estate developer Kaisa Group.
