China launched a major overhaul of its insurance supervisory system to grant more power to local regulators in overseeing parts of the country’s RMB 22 trillion ($3.1 trillion) insurance sector, reported Caixin.
The China Banking and Insurance Regulatory Commission (CBIRC), the national regulator, issued guidelines Tuesday for a supervisory shakeup affecting the country’s 87 property insurers and 13 reinsurance companies. The move renewed earlier efforts to decentralize regulation in the banking and insurance industries to improve efficiency.
The overhaul will reduce regulatory costs while freeing companies from redundant administrative procedures, said Zhu Junsheng, an insurance industry expert at the Development Research Center of the State Council. The previous concentrated supervisory system could discourage companies from making business innovation, Zhu said.
Under the new guidelines, the CBIRC will hand over regulatory responsibilities for 64 property insurers to local authorities. The top regulatory body will maintain direct oversight of the remaining 36 institutions, mainly large players with nationwide services such as PICC Property and Casualty Co. Ltd. and Ping An Property & Casualty Insurance Co. Ltd., as well as agricultural-focused property insurers, internet insurers and reinsurers.