Xiang has not appeared in public since the annual insurance conference in mid January where he pledged to rein in the wild behaviour of China’s insurance money.SCMP: Cross hairs are on insurers as China takes aim at raiders
With the blessing of former premier Wen Jiabao, the ex-auditor and central banker landed the top job at the China Insurance Regulatory Commission in 2011.
He is in charge of granting life insurance licences, or virtual cash machines, or money printers as insiders call them.
In the first 11 months of 2016, China’s life insurers sucked in more than 1.1 trillion yuan of insurance premium, with investment schemes containing minimal insurance elements.
...Front line salespeople typically promise their policyholders a guaranteed rate of return of over 6 per cent, double the prevailing bank deposit rate. Insurance companies are taking deposits from the public, without submitting to the regulatory restrictions and operating costs of a bank.
Much of the money will be used to serve the insurers’ owners, for buying equities that owners are hoping to jack up, or investing in the owners themselves as trust products.
Not surprisingly, the queue for an insurer’s licence is long, growing to more than 100.
China’s insurers are getting cross hairs on their backs, as financial regulators take aim at corporate raiders who use insurance premiums collected from policyholders to finance their takeovers and equity investments.
Insurers should “reflect on their faults,” manage their funds with greater care, said Chen Wenhui, vice chairman of the China Insurance Regulatory Commission (CIRC) in Beijing on Thursday, during an annual conference with insurance companies nationwide .
Some insurers have been “reckless” with their investments, by making highly leveraged hostile takeovers, or leading outsize acquisitions overseas far beyond their core business, Chen said.