General Office of the China Banking and Insurance Regulatory Commission, Circular on the Involvement of Insurance Capital in Credit Risk Mitigation Instrument and Credit Protection Instrument Business

中国银保监会办公厅关于保险资金参与信用风险缓释工具和信用保护工具业务的通知

June 07, 2019 | BY

Susan Mok

Insurance capital's derivatives investments are limited

Clp Reference: 3910/19.05.07 Promulgated: 2019-05-07
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Issued: May 7, 2019

Applicability: For the purposes of this Circular, the term “credit risk mitigation instrument” and “credit protection instrument” means a credit derivative used to manage credit risks. Credit risk mitigation instruments include contract-based products and warrant-type products, and credit protection instruments include credit protection contracts and credit protection warrants (Article 1).

The credit risk mitigation instrument and credit protection instrument business in which insurance capital is involved shall be limited solely to hedging against risks. An insurance group (holding) company, insurance company or insurance asset management company may not act as the credit risk bearing party and shall have derivative operation capabilities and credit risk management capabilities (Articles 2 and 3).

Related legislation: Measures for the Administration of the Use of Insurance Capital and Tentative Measures for the Participation in Financial Derivatives Trading by Insurance Capital

clp reference: 3910/19.05.07 Issued: 2019-05-07

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