News eDaily19 Jun 2017

China:Regulator intensifies crackdown on sales of Hong Kong insurance products on mainland

19 Jun 2017

The Chinese insurance regulator has said that it would continue to crack down on illegal sales of Hong Kong insurance products on the mainland, which it says have led to capital outflows and money laundering, reported Reuters.

The CIRC withdrew one agency's licence and shut down 35 websites or social media accounts on a leading instant messaging platform WeChat during a targeted investigation launched last year that was aimed at those products, the regulator said in a statement last Friday.

In addition to those shut down, a further 27 websites and social media accounts on the WeChat platform have been ordered to cease the unauthorised marketing. The regulator did not name the websites and accounts.

CIRC said that the activities have not only "distorted the order of the domestic insurance market" but also "disturbed the government's foreign currency management and led to asset outflows and even money laundering".

The regulator said it would have "zero tolerance" for the illegal sales of Hong Kong products, but did not provide details about the activities.

The CIRC said it teamed up with police and the telecommunications authorities in a crackdown which began at the end of 2016 in 10 major provinces and municipalities including Shanghai and Guangdong.

Chinese regulators, which have taken severe measures to halt the illegal outflows of funds since last year, are concerned that the purchase of overseas insurance products has become a channel for mainland Chinese to move money abroad, avoiding capital restrictions

Hong Kong's life insurance market saw strong new business growth of 41.5% in 2016, with a significant portion of business coming from mainland Chinese customers, Standard & Poor's said.

Last year, China UnionPay cardholders were banned from paying for insurance investment products in Hong Kong through UnionPay.


 

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