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China drafts overhaul to raise insurer capital and expand investments
The draft would lift the minimum insurer paid-in capital to about $149 million, roughly five times the current requirement, and would formally allow equities and gold investments.
China's financial regulator has released a draft overhaul of the country's Insurance Law, setting up what it calls the biggest rewrite in more than a decade, with tighter capital rules and broader investment permissions. The draft, opened for public comment on September 4, is led by the National Financial Regulatory Administration, the super-regulator that took over banking and insurance oversight in 2023.
Under the proposal, the minimum capital to start an insurer would rise to about 1 billion yuan, roughly $149 million, from the current requirement of 200 million yuan. The regulator also proposes a wider set of supervisory tools to intervene with troubled companies earlier, before they collapse.
The draft would formally permit insurers to invest in equities and gold, and it aims to steer the sector amid margin pressure that has accompanied falling interest rates. It also aligns with Beijing's push for consolidation and tighter scrutiny of shareholders.
For existing composite reinsurers, the current 300 million yuan minimum would also be expected to move higher, though the exact figure is left to regulators to set later. The regulator’s drafting notes say the changes are designed to eliminate undercapitalized entrants, while the draft places major shareholders and ultimate controllers under direct legal scrutiny, including requirements tied to track records, verified sources of funds, and disclosure of related-party dealings, according to Insurance Business.
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