Insurance regulator introduces solvency rules
15 July 2008
The China Insurance Regulatory Commission (CIRC) said it would introduce capital adequacy requirements for mainland insurers for the first time beginning in September, the South China Morning Post reported. The aim of the move is to increase risk management and efficiency in the insurance sector. Under the new rules, insurers with less than half of assets available in reserves would be classified as insolvent. Insurers with 100-149% solvency ratios will be considered "type 1" solvent, while those with ratios of 150% and higher will be considered "type 2" solvent. Insolvent insurers will be required to increase their capital and restrict management pay and shareholder dividends.