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China regulator to inspect Foresea Life, Evergrande Life

Updated: Dec 7,2016 7:29 AM     Xinhua

BEIJING — China’s insurance regulator will send two inspection teams to Foresea Life and Evergrande Life amid government efforts to contain possible financial risks brought by massive stake buyouts by heavyweight insurance players.

The China Insurance Regulatory Commission said it will carry out spot checks on the two companies over their management, financial sheets, insurance product services as well as capital use.

Any violation of the rules will be strictly punished to maintain market order, the regulator warned.

The latest move followed the regulator’s decision on Dec 5 to suspend Foresea Life Insurance, a unit of Chinese financial conglomerate Baoneng, from selling its questionable high-return insurance service.

On Dec 3, the head of China’s securities regulator condemned “barbaric” leveraged acquisitions by some asset managers using questionable funds, hinting at recent instances of stake buyouts by heavyweight insurers.