China’s Insurance Regulatory Commission (CIRC) released proposals on Thursday to trial new regulatory rules that would allow the government deeper oversight of insurer’s finances, Caixin Global reports.
Under the new system, insurers will receive a rating from A to D based on their ability to manage assets and liabilities, those with lower ratings undergoing greater government scrutiny and capital restrictions. Insurance agencies with an A rating, on the other hand, will be encouraged to release more products and will have greater freedom over their asset management.
The trial period would last for at least a year, during which no regulatory actions would be taken based on the results, the CIRC added.
“No regulatory actions doesn’t mean no supervision,” said Lin Du, deputy director of the Fund Regulatory Supervisory Division of the CIRC’s Insurance Fund Management Regulatory Department. “We will strengthen our analysis and risk monitoring through system improvement, which is an ongoing task.”
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