The China Insurance Regulatory Commission (CIRC) has released a draft of rules for public comment on further strengthening the supervision over insurance products with high cash value.
The regulation will take effect on January 1, 2016. The CIRC requires insurance companies that provide high cash value products to keep the comprehensive solvency adequacy ratio at above 100 percent, and core solvency adequacy ratio at higher than 50 percent.
Insurers also are required to keep the premium from high cash value insurance products at a rational level that matches their capital strength, i.e., Premium from high cash value products should not be more than twice of the capital invested.
The CIRC also urged the insurance companies to ward off the interest spread risk, asset liability matching risk and cash flow risk.
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