Regulator curbs buying spree in China

Chinese regulators have intensified their crackdown on insurers’ use of high-risk, high-return products, which are often used to fund corporate deals.

The clampdown comes days after the country’s securities regulator separately denounced companies making highly leveraged takeovers as “barbarians” and “robbers.”

The China Insurance Regulatory Commission (CIRC) has said it had barred Foresea Life Insurance from issuing “universal insurance” products, according to the Financial Times.

The CIRC also said it had halted online sales of universal insurance products by six major insurers.

Regulators have become increasingly wary as Chinese insurers have made a series of highly leveraged acquisitions in recent years. Such concerns were believed to be part of the reason Anbang Insurance withdrew its USD14 billion bid for Starwood Hotels & Resorts.

Earlier this year, the chair of the CIRC warned against insurers, awash with cash from universal insurance premiums, becoming “automatic teller machines” for takeovers.