News eDaily08 Jun 2017

China:Regulator to tighten asset-liability management

08 Jun 2017

China's insurance regulator is set to tighten standards on the management of liability, investment, and liquidity risks by insurers as it assesses solvency requirements.

The CIRC is now prioritising the management of assets and liabilities in tandem with moves by other regulators to lower risks in the banking, securities, insurance, and asset management sectors, said Mr Jimi Zhou, PwC China financial services consulting partner.

There will also be a stronger regulatory focus on investment risks amid greater volatility in stock and alternative investment markets, reported Shanghai Daily citing Mr Zhou.

“The regulator will also put greater emphasis on the actual implementation of risk control measures rather on than the setting up of a management framework as it did in the first year of implementing the Solvency Aligned Risk Management Requirement and Assessment (SARMRA),” he said.

Under SARMRA, the CIRC assigns a score to each insurance company after assessing its risk levels and management capabilities. Companies with scores below 80 will face a higher solvency requirement.

Last year’s results showed the average score for insurance companies in China stood at 74 points.

 

 

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