(Yicai Global) Dec. 14 – Discussions among the top echelons of China Insurance Regulatory Commission (CIRC) indicate that the upper limit of the proportion of insurance capital entering the stock market will be reduced from the present 40 percent to 30 percent. Also, CIRC will buttress its supervision of violations occurring in the course of insurance capital entering the stock market.
Huang Hong, vice chairman of the CIRC, told reporters yesterday that "During the 'bailout' period of last year, the CIRC relaxed the proportion to a certain extent and now a return is expected to return to the original proportion."
This means that, near term, the CIRC may adjust the proportion of equity investment to 30 percent from the 40 percent ceiling raised during the bailout.
In June 2015, China's stock market experienced a large pullback, and the Chinese government immediately floated a raft of measures to cement market confidence: the -- 'bailout' -- during which the CIRC raised the proportion of insurance capital allowed to enter the stock market to 40 percent.
However, data from the Insurance Asset Management Association of China shows the current proportion of domestic equity investment of insurance capital is only about 14 percent, far less than the upper limit fixed by regulatory standards.