The Central Commission for Discipline Inspection (CCDI) announced that Xiang Junbo was under investigation on 9 April.
On Monday, an official within the Communist Party confirmed to the official press agency of the Chinese government, Xinhau News Agency, that Xiang has now been removed from his role.
Xiang took control of the CIRC in 2011 after serving as chairman of the Agricultural Bank of China. He was also a former vice chief of the National Audit Office and served as a member of the central bank’s monetary policy committee.
It is understood that CIRC vice chairman, Chen Wenhui, will assume the top role on an interim basis, until a permanent replacement for Xiang is found.
Insurance industry clean up
According to Hong Kong-based newspaper South China Morning Post, the new chairman will likely be selected from outside the current regulatory framework.
With the government determined to clean up China’s insurance industry and carve a clean break from Xiang’s regulatory style and his strategic vision, Chinese leaders are likely to pick someone outside the industry as his replacement, several sources familiar with the situation told the SCMP.
The changes come amid rising concerns about financial risk in the world’s second-largest economy.
In a statement on 10 April, CIRC stated that the insurance sector should guard against financial risks, support supply-side structural reform and help promote the development of the real economy.
China’s premier Li Keqiang said the country's financial sector is vulnerable to risks such as bad assets, bond defaults, shadow banking and internet financing, with frequent illegal and corrupt activities.