(ATF) China has drawn up reform plans for its insurance industry to meet the growing health and financial needs of the country’s ageing population.
In a statement seen by ATF, China’s State Council has deployed measures to promote the expansion and quality of its life insurance industry under the Regulations on the Supervision and Administration of the Use of Medical Security Funds (Draft).
The new measures are designed to provide for the care of China’s 300 million pensioners.
Insurance is the latest part of the financial industry to get a revamp as China presses on with the internationalisation of its capital markets.
While commercial life insurance has expanded recently, there are few products that offer affrodable protection for the nation’s less well-off.
“It is necessary to adapt to the needs of the masses for health, pension, and safety protection, promote the deepening of reform and opening up of the insurance industry, highlight key points to optimise supply, and provide a wealth of high-quality personal insurance products,” the State Council stated.
The government will support the development of more affordable products to cover serious illnesses and to integrate existing basic medical coverage plans, according to the report, while insurance companies will be ordered to promote them.
The measures will incorporate commercial endowments to accelerate uptake. Officials want endowment insurance that is easy to insure, flexible to pay and stable, and actively develop annuity insurance products.
Insurance firms will be expected to develop supplementary pension insurance products that can be bought by employers for their workers.
The proposals also make provisions for limiting speculation on capital markets by insurance funds. They will be able to invest up to 45% of total assets in equities and will be encouraged to participate in funding major projects such as infrastructure and urbanisation programmes to help play a supporting role in the real economy.
The State Council will carry out in-depth special management of related transactions, and resolutely crack down on illegal acts of embezzlement, arbitrage and other misuse of insurance company funds.