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China Probes Insurance Fund Use In Real Estate To Curb Risk

Regulators will look into activities of insurers that are beyond the allowed investment scope, including those invested in commercial real estate projects


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The probe will also look into areas where insurers helped to raise funds for property projects irregularly, or even breached the fund raising limit. Photo: Reuters

 

Chinese regulators have opened an investigation into the use of insurance funds in a bid to combat any illegal use and to curb risk in the industry, the state-backed Shanghai Securities News reported on Thursday.

It said an earlier routine inspection had found some insurance institutions had serious compliance issues.

Regulators will look into investment activities of insurers which was beyond the allowed investment scope, including those invested into commercial real estates projects, and into unlisted property developers, the report said, citing unnamed sources from insurance firms.

It will also look into areas where insurers helped to raise funds for property projects irregularly, or even breached the fund raising limit, the report added.

Institutions now have to formulate rectification plans – including holding accountable staff responsible for violations or lapses – deeply analyse the root causes of problems, re-examine assets and promote reasonable capital replenishment, the newspaper said.

 

  • Reuters with additional editing by Kevin Hamlin

 

 

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Kevin Hamlin

Kevin Hamlin is a financial journalist with more than 40 years of experience covering Asia. Before joining Asia Financial, Kevin worked for Bloomberg News, spending 12 years as Senior China Economy Reporter in Beijing. Prior to that, he was Asia Bureau Chief of Institutional Investor for ten years.

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