China's insurance regulator will set a precedent by using an industry protection fund to control the country's fourth-largest insurance company, which has been marred by a scandal, the Financial Times reported. The China Insurance Regulatory Commission said it would take a 22.53% stake in New China Life Insurance from three shareholders – Longcin Group, Hainan Gelindao Investment and Orient Group Industry – which allegedly borrowed US$209 million from the insurance company illegally under former chairman Guan Guoliang. Guan was removed from his post last December for allegedly using US$1.7 billion to speculate in the Beijing property market. The insurance protection fund was set up in January 2005 to protect policy holders from crises at their insurers.
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