The insurance regulator CIRC issued its third circular within a brief period of just nine days, targeted at both clamping down on insurance players who violate regulations and righting disorder in the market.
The circular, released on 28 April, followed two others in the same vein that were issued on 20 and 23 April. The series of notices in such a short time span from the CIRC is a grave warning that the regulator would be stepping up its supervision to prevent risk in the insurance sector. They show how seriously the regulator is taking its functions.
The CIRC has vowed to improve the conduct of its officials after its head Xiang Junbo was placed under investigation last month and stripped of his post as CIRC Chairman. The insurance regulator said it has to reflect deeply on the bitter lessons of the actions of Xiang, who is alleged to have committed serious disciplinary violations.
The 28 April circular highlighted eight areas where special corrective action might be needed in the insurance areana. These are:
- fake capital injections into insurance companies;
- improper corporate governance in insurance companies;
- improper use of insurance funds;
- inappropriate product designs including products which allow easy redemption or surrender;
- delayed compensation or complicated compensation procedures;
- improper levying of fees;
- false data.