CBIRC issues notice on the Investment of Funds
In order to further optimise the allocation structure of insurance assets, improve the quality and efficiency of insurance funds serving the real economy and prevent investment risks, the China Banking and Insurance Regulatory Commission recently revised and issued a notice on the investment of insurance funds in relevant financial products.
The Notice consists of 17 articles. The scope of financial products that insurance funds are allowed to invest has been broadened. Wealth management products, single asset management plans, and debt-to-equity swap plans are included into the scope of investable financial products to further improve the allocation structure of insurance assets. The primary responsibility of insurance asset management companies shall be enforced. It is stipulated that insurance asset management companies, entrusted to invest in financial products, shall undertake active management responsibilities such as due diligence, investment decision-making, post-investment management, etc.
The external credit rating requirements for insurance funds to invest in credit asset-backed securities, asset-backed special plans and other products are cancelled. Insurance asset management companies are guided to fulfill the primary responsibility of risk management. The requirements for look-through supervision have been strengthened. For some financial products, insurance institutions are required to have corresponding investment management capabilities according to the nature of the underlying assets of such products and incorporate such underlying assets into corresponding investment proportion management according to the types of such assets, to reflect the true risks of investment assets. Next, standards have been set for the investment in single asset management products. Insurance institutions are also required to clarify the management responsibilities after investing in financial products, assign professional post-investment management personnel, regularly follow up the investment status, and take effective measures to control relevant risks.
