News eDaily08 May 2017

China:CIRC acts against Anbang for non-compliance with product rules

08 May 2017

The CIRC last Friday banned fast-growing Anbang Insurance from selling two investment products and from seeking approval for new products for three months.

Anbang Life, a key part of Anbang Insurance Group, was cited by the CIRC for "disrupting market order" by designing a product that bypassed regulations aimed at curbing growth of short-term, risky universal life insurance products, Reuters reported citing CIRC's online public notice.

The life insurer presented a product as long-term annuity insurance to the regulator but the CIRC said that it was effectively a two-year investment that should have been subject to more stringent regulations on short- and medium-term investments. The second Anbang Life product was marketed despite lacking the signature of the company's chief actuary, in violation of rules, the notice said.

A spokesman for Anbang Insurance Group did not immediately comment when contacted by Reuters.

The regulator instructed Anbang to rectify its product development and management.

The CIRC's move against Anbang Life comes during a widespread regulatory crackdown on what is seen as the excessive marketing of universal life products by some insurers, and as China's central leadership moves to curb risk in the financial system. Some insurers have used the funds from the sales of these products to aggressively acquire stakes in listed companies.

Over the last two years, Anbang has taken significant stakes in a handful of listed banks and property firms, including China Minsheng Banking Corp, Agricultural Bank of China, Gemdale Corp, and China Vanke .

Other insurers have been caught up in the crackdown. In December, CIRC suspended Qianhai Life, a unit of financial conglomerate Baoneng Group, from selling universal life products until it addressed problems managing customer accounts and information.

The State Council announced separately on Friday that Xiang Junbo, the chairman of the China Insurance Regulatory Commission, had been removed from office. No successor was announced.

Mr. Xiang’s dismissal had been widely expected after Chinese anti-corruption investigators announced a month ago that they had investigated him over “severe violations of discipline. The government did not link Mr Xiang's case to Anbang.

| Print | Share

Note that your comment may be edited or removed in the future, and that your comment may appear alongside the original article on websites other than this one.


Recent Comments

There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.

Other News

Follow Asia Insurance Review