BEIJING, Dec. 13 (Xinhua) -- The head of China's insurance regulator said Tuesday that insurers should not act as securities speculators amid market concerns driven by large stake acquisitions using borrowed money.
"Insurance companies should be financial investors in good faith, instead of making hostile takeovers," Xiang Junbo, chairman of the China Insurance Regulatory Commission (CIRC), said during a meeting, vowing stricter supervision over the sector.
Insurance should provide long-term capital for the real economy and defend against financial risks, he added.
The remarks came as a hard-line response to recent "barbaric" behavior of some insurers using leveraged money to buy shares of listed companies. Triggering sharp volatility in the market, the moves annoyed corporate executives and caused individual investors to suffer.
The CIRC has strengthened its supervising efforts, including suspending Evergrande Life, the insurance arm of China Evergrande Group, from investing in the stock market.
Xiang promised to improve monitoring of insurance funds, encourage insurers to reduce investment in equities, rein in speculative activities, and control universal life insurance.
Insurers should shift to their main business to serve China's manufacturing upgrades and new economic drivers, rather than focusing on portfolio investment, he said.
Xiang predicts China's combined insurance premium will surpass 3 trillion yuan (around 435 billion U.S. dollars) this year, with the sector's total assets reaching nearly 15 trillion yuan.
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