Regulator warns of risks in insurance investment schemes

Owing to growing concerns over the health of domestic debt markets and its broader impact on the economy, the insurance regulator in China has warned of risks in investment programmes marketed by insurance asset management firms.

The China Insurance Regulatory Commission (CIRC) recently issued an internal notice, warning of risks involving so-called insurance investment programmes, which are off-balance debt schemes issued by asset management firms of insurance firms to raise money from insurers and other institutional investors to invest in industrial projects, according to a Reuters report.

Some issuers are not properly backed up by their parent firms, which are supposed to guarantee the payments if the programmes face financial difficulties, it said.

The CIRC is tightening supervision of the issuance of such products, according to the notice issued to insurers and insurance asset management companies.