China Insurance Regulatory Commission, Circular on Matters Relevant to Bond Investment

Issued: September 22 2009

Main contents: In regards to the requirement on the issuer of the enterprise (corporate) bonds invested by an insurance institution, the issuer's realised average annual distributable profit for the most recent three financial years shall not be less than one year's coupon payments of all the bonds (Article 1). The maximum ratio of investment in enterprise (corporate) bonds by an insurance institution shall be raised from 30% to 40% of the institution's total assets at the end of the previous quarter (Article 2). Bonds and convertible bonds issued in the Hong Kong market by large state-owned enterprises, and H-share and red chip companies announced by the Hong Kong Stock Exchange that are invested by insurance institutions shall have a long-term credit rating of BBB or above or the equivalent as assessed by an internationally recognised rating agency (Article 3).

Related legislation: Tentative Measures for the Administration of Investments in Bonds by Insurance Institutional Investors , Aug 17 2005, CLP 2005 No.9 p.36; and Circular on Increasing the Bond Products in which Insurance Institutions May Invest , Mar 19 2009, CLP 2009 No.4 p.44 clp reference:3910/09.09.22promulgated:2009-09-22