BEIJING — The Chinese insurance regulator has vowed to strengthen supervision to fend off financial risk and propel reform in the sector.
“The whole sector will put risk control in a more important position,” Chen Wenhui, vice-chairman of China Insurance Regulatory Commission (CIRC), said when addressing a two-day internal meeting ending on July 29.
“Actions will be taken to crack down on serious violations, dissolve hidden risk points and improve the long-term mechanism to hold the bottom line of no systemic risks,” Chen said.
The CIRC deputy head stressed the insurance should be a “dashpot” for the economy and a stabilizer for society, instead of a source of risk.
His words came as a further response to big insurers that have grabbed headlines by using leveraged money to buy in shares in listed companies in seek of short-term profits or controlling stakes, triggering sharp volatility and market concerns late last year.
The insurance regulator has moved in to restrain such deals with an array of measures rolled out.
Highlighting stability and financial security, Chen said insurance would in no way become financing and investment tools of big shareholders and pledged policies to ensure healthy development of the sector with improved competitiveness and more opening up.
The regulator will strengthen the sector’s role in supporting the real economy, he said.
Thanks to continued financial reforms and opening up, China’s insurance saw booming growth in the past years. Insurance premium income jumped 27.5 percent year-on-year to 3.1 trillion yuan (about $460 billion) in 2016.