BEIJING, March 23 (Xinhua) -- Chinese insurers with high solvency ratio and good asset quality are allowed to properly raise their equity investment proportion from the current ceiling of 30 percent, reported Xinhua Finance, a financial information platform run by Xinhua News Agency Monday.
The report quoted Zhou Liang, vice chairman of sector regulator China Banking and Insurance Regulatory Commission (CBIRC) that it is currently a good timing for insurance capital to enter capital market and the eased control over investment proportion is expected to help stabilize the market.
During the past weeks, China's stock market remained relatively resilient contrary to the volatile international financial market and. In next step, CBIRC will actively support insurers to carry out long-term and stable value investing practices and permit more leeway for them in the principle of prudential supervision, said Zhou.
In China, the balance of insurance fund has mounted up to 18.8 trillion yuan at present and their investment in stocks and funds reached about two trillion yuan, taking up 10.8 percent of the total, according to Zhou.
Wang Xujin, director of insurance research center of Beijing Technology and Business University said allowing insurance companies to raise their equity investment ratio, whose levels are up to concrete market demand, is a wise move not only satisfying market needs but also demonstrating stronger corporate governance of insurers in China.
As Wang held, insurance fund is an important source of funds and the second largest institutional investor for capital market, always serving as a crucial condition for the stability of capital market.
In 2015, the former China Insurance Regulatory Commission, integrated with China Banking Regulatory Commission as the CBIRC now, once loosened the proportion requirements for insurers to invest in blue-chip stocks to stabilize the capital market. (Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)
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