The China Risk Oriented Solvency System sets new requirements and calculation models for capital adequacy and solvency capability of insurers. Insurance companies are also required to submit their solvency reports quarterly.
Xinhua said the new rules will take effect this quarter.
China’s insurance industry, ranks the third in the world, had a 2.4trn yuan ($36.5bn, £25.3bn) worth of premium income in 2015, up 20% from the previous year.
Offshore restrictions
In a separate report Bloomberg News, citing people with knowledge of the matter, said the foreign exchange regulator had effectively tightened restrictions on the purchases of insurance products overseas as part of government efforts to stem money outflows that topped $1trn last year.
Chinese people have been flocking to Hong Kong to buy insurance policies, which typically come with better service than on the mainland and also offer them a way to skirt controls on how much capital they can move abroad.
Under the new restrictions, Bloomberg said purchases of insurance products using UnionPay credit and debit cards will be capped at $5,000 per transaction, according to its sources.
Purchases of insurance policies by mainland visitors in Hong Kong reached HK$21.1bn ($2.7bn) last year through September, following a 64% increase in 2014, according to the city’s industry regulator.
Pru hit
The Bloomberg news was cited by UK media as causing a sharp fall in Prudential shares on the London Stock Exchange. Prudential shares dropped by more than 8% and triggered an automatic suspension of trading.
