A statement on Anbang Insurance Group’s website confirmed that the China Banking Insurance Regulatory Commission approved plans for the rescue package on 28 March.
The money is intended to be “supportive of strengthening Anbang’s risk management, ensuring ample liquidity and maintaining the stability of its operations”.
Troubled times
Anbang has been under close scrutiny over the past year, resulting in the China Insurance Regulatory Commission (CIRC) taking control of the group in February 2018.
Anbang’s chairman, Wu Xiaohui, was removed from his post on 23 February on charges of illegal fund raising, fraud and embezzlement.
In late March, Wu had appeared in a Shanghai court and faces life behind bars if found guilty.
Rescue package
The capital injection of RMB60.8bn will be paid by a non-governmental industry fund, the China Insurance Security Fund (CISF), and it will take Anbang’s registered capital to RMB61.9bn – illustrating how low the company’s reserves were.
The CISF will temporarily hold shares in the group during its period under interim management, as it works to replace Wu.
The industry fund will gradually transfer its shares in the insurer to maintain Anbang’s status as a private company.
In the near future, Anbang will start to select strategic shareholders to actively introduce large-scale private investors with a strong capital position, distinct core business, sound investment philosophy and strong operational track record to participate in its equity restructuring, the statement added.
The company will, in particular, welcome private companies in the area of pension insurance, healthcare, internet and technology, and those that “share synergic resources with its core insurance business”, it said.
