Saturday, January 20, 2018

China considers revising insurance security fund rules

The China Insurance Regulatory Commission (CIRC) is reportedly looking at revising existing rules that govern the country’s insurance security fund to help prevent industry risks.

The move, according to industry experts, will allow the fund to provide necessary liquidity support to insurers in case of crisis.

Among the proposed revisions is to require insurance companies to submit a certain proportion of capital to the fund based on an evaluation of their risk management capability.

The revised rules will also allow the country’s insurance security fund to offer capital support to insurers if they face a liquidity crisis.

However, the liquidity support that insurers can obtain from the insurance security fund cannot exceed 15% of the outstanding value of the fund in the previous year.

CIRC is currently asking for industry opinions for the draft revision.

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