Chinese regulator steps up scrutiny over insurance firms

BEIJING - China's top insurance regulator said Friday it would tighten scrutiny over the launch of new insurance companies in a move to defuse risks in the sector.

The China Insurance Regulatory Commission (CIRC) will strengthen oversight to ensure that new insurance firms operate according to company plans, funding provided by shareholders is authentic, and that their stakes are not transferred during the preparatory process of the companies, according to a CIRC statement.

The commission will also more strictly evaluate the performance of company chairmen and senior management staff, and push the firms to improve regulatory compliance.

The move is aimed at enhancing corporate governance and preventing risks at the source, the CIRC said.

Authorities have recently stepped up regulation of the insurance sector, vowing to stop the illegal use of insurance funds, keep the leverage ratio under control and fill regulatory gaps.

The move is part of the deleveraging of the overall financial sector to ward off systemic risks after years of a relatively loose monetary stance.