Posted on Jun 17, 2010 by Sergio Ulloa
The China Insurance Regulatory Commission (CIRC) appears to be in the latest stages of discussions to ease the restrictions on some types of investments made by insurance companies in China. The proportion of the capital from insurance companies invested in the stock market will be increased to a 25 percent from the current 20 percent limit.
Other restrictions currently imposed on insurance companies under review include the policies governing investments in bonds, the Hong Kong stock market, and the threshold for debt investments - which is expected to be lowered.
One area that will not be modified pertains to property investments made by insurance companies. At present, insurance companies are not allowed to invest in residential buildings, be involved during the property development stage or do direct investments in the commercial property sector. The rules addressing property investment are expected to be finalised at a later time, although it is anticipated that the current investment restrictions will remain largely unchanged.
Analysts anticipate that the new rules will procure about US$1.5 billion (EUR 1.2 billion) of capital into the Chinese stock market.
The new regulations are expected to be released soon.
Regulatory Body mentioned:
The China Insurance Regulatory Commission (the "CIRC"), established on November 18, 1998, is authorized by the State Council to conduct administration, supervision and regulation of the Chinese insurance market, and to ensure that the insurance industry operates stably in compliance with law. In 2003, the State Council upgraded the CIRC from a semi-ministerial institution to a ministerial institution directly under the State Council, and to expand the size of the CIRC in terms of staff, internal setup, and local offices.