China Banking and Insurance Regulatory Commission, Rules for the Regulation of the Solvency of Insurance Companies; Answers to Questions No.2: Perpetual Capital Bonds

中国银行保险监督管理委员会保险公司偿付能力监管规则——问题解答第2号：无固定期限资本债券

June 07, 2019 | BY

Susan Mok

Insurance companies are required to compute the minimum capital for perpetual bond investments

Clp Reference: 3910/19.04.28 Promulgated: 2019-04-28
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Issued: April 28, 2019

Main contents: An insurance company that invests in the perpetual capital bonds issued by a bank shall compute the minimum capital for the risk of default by the transaction counterparty. Where the risk exposure is the book value, the fundamental risk factor of a policy bank or a large state-controlled commercial bank shall be 0.20 and that of a national joint stock limited commercial bank shall be 0.23.

Related legislation: Circular on Matters Relevant to the Investment in Supplementary Bonds of Banks by Insurance Capital

clp reference: 3910/19.04.28 Issued: 2019-04-28

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