(Yicai Global) Feb. 27 -- China's insurance regulator has imposed heavy fines on Foresea Life and Evergrande Life for violating rules on the use of insurance funds. The former received a fine of CNY800,000 (USD116,000) and its chairman, Yao Zhenhua, was dismissed and banned from the insurance industry for 10 years.
Evergrande Life, the insurance arm of leading property developer China Evergrande Group [HKG:3333], was disqualified from investing in stocks for one year, and two of its managers were barred from the industry for five and three years, respectively. The China Insurance Regulatory Commission announced the penalties on Feb. 24 and 25.
According to investigations carried out by the CIRC, offences committed by Foresea Life include document falsification and non-compliance in its use of insurance funds. Evergrande Life was also accused of non-compliance in its use of insurance funds and speculation using insurance funds.
Both insurers have been very active in China's stock markets since 2015. Together with their affiliates, they upped holdings in many listed firms. The most well-known example of their aggressive investment style, saw them both bidding up China Vanke [SHE:000002], albeit separately. Foresea Life and its affiliates became Vanke's biggest shareholders, while Evergrande Life and affiliates also took major stakes in the country's once-largest real estate developer.