Yang Qianwen / Yicai2016-12-13
(Yicai Global) Dec. 13 -- China’s Insurance Regulatory Commission held an urgent meeting with heads of insurance companies this afternoon, Yicai Global learned from a source close to regulators last night.
The commission is expected to give government opinions on insurance funds’ recent purchases and sales of listed companies’ shares on the secondary market in a non-compliant manner.
The CIRC has previously imposed punishments on Foresea Life Insurance Co. and Evergrande Life Insurance Co., respectively, for their irregular capital operations in the domestic stock markets.
The commission has accused Evergrande Life of conducting leveraged, frequent and massive purchases and sales of listed companies’ shares in its entrusted stock investment operations.
It has also asked Foresea Life to stop its new universal life insurance business due to problems identified in product development and management and prohibited the insurer from declaring new products within the next three months.
The commission has also halted the online insurance business of six companies including Foresea Life and Evergrande Life, citing problems with universal life insurance products in the online insurance sector such as misleading sales and ruinous competition in settlement interest rates.
Foresea Life and Evergrande Life are emerging insurance companies in China and are known for their aggressive stock-market investments.
Evergrande Life's "rapid investment and withdrawal" style has already led to a disciplinary interview with the regulator, which required the company to uphold the long-term, steady investment principles of an insurance fund.