China Insurance Regulatory Commission, Circular on Regulating Stock Investments of Insurance Institutions

中国保险监督管理委员会关于规范保险机构股票投资业务的通知

May 09, 2009 | BY

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Insurance companies required to set up graded stock pools.

Clp Reference: 3910/09.03.18 Promulgated: 2009-03-18

Issued: March 18 2009

Main Contents: If an insurance company has a solvency adequacy ratio of at least 150%, it may, in accordance with provisions, normally invest in stocks. If its solvency adequacy ratio falls between 100% and 150% for four quarters in succession, it shall revise its stock investment strategy, and if its solvency adequacy ratio falls below 100% for two quarters in succession, it may not increase its stock investments, it shall report its market risks and take effective counter and control measures in a timely manner (Article 1).

An insurance company or insurance asset management company shall establish different grades of stock pools, such as a prohibited pool, reserve pool and core pool (Article 2).

The Circular also requires the establishment of a fair trading system, operation in accordance with provisions to control overall risk, strengthening of dynamic monitoring of market risks and implementation of position risk responsibilities.

Related Legislation: Tentative Measures for the Administration of Stock Investments by Insurance Institutional Investors, Oct 24 2004, CLP 2004 No.10 p.39; and Criteria in Respect of Stock Investment Capabilities of Insurance Companies.

clp reference:3910/09.03.18prc reference:保监发 〔2009〕 45号promulgated:2009-03-18

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