(Yicai Global) Jan. 14 -- Chinese online insurer Anxin Property & Casualty Insurance has been ordered by the country’s banking and insurance regulator to raise more capital to improve its solvency ratio and reduce risk.

Anxin Insurance’s core solvency adequacy ratio, which is the measure of an insurance company’s ability to pay back debt, reached minus 125.7 percent at the end of October, indicating it has severe liquidity problems, the China Banking and Insurance Regulatory Commission said today.

The insurer must inject more capital into the business and must cease issuing any new car insurance policies from today, the CBIRC said. It should also cut the salaries of its senior management by at least 20 percent.

Anxin Insurance, which has a registered capital of CNY1.3 billion (USD200 million), has amassed debts of CNY800 million (USD123.8 million) since it was set up five years ago. It has also been dogged by scandal, as the underwriter of peer-to-peer lending platform Migang Finance that filed for bankruptcy in 2018 and was the subject of criticism by the CBIRC at the end of last year for making false claims about its insurance products.

Anxin Insurance had said in September that drugmaker CP Pharmaceutical Group was thinking of investing CNY215 million (USD33.2 million) for a 14.33 percent stake to become its second-largest shareholder. The Beijing-based firm’s biggest shareholder is China Chengxin Credit Ratings Group with 33 percent equity.

Editor: Kim Taylor