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China regulator punishes Evergrande Life for irregular stock trading

Xinhua, February 25, 2017 Adjust font size:

China's insurance regulator said Saturday that it has imposed measures to restrict stock trading of Evergrande Life, a unit of property conglomerate Evergrande Group, for one year due to the insurer's irregular investment operations.

This comes after China Insurance Regulatory Commission (CIRC) deployed investigation teams to check insurers' operations amid the government's efforts to contain possible financial risks.

Irregularities were found in the Evergrande Life's stock investment trust business and internal management profile, said the CIRC in a statement, adding that the company's speculative trading activities in certain stocks between September and November has caused "grave social consequences."

CIRC required that the insurer's total equity investment should be no more than 20 percent of its total assets. The country's insurers are allowed to invest up to 40 percent of their total assets in equity market.

Two persons responsible for the irregularities will be banned from the country's insurance industry for five years and three years, respectively, while another two will be removed from their posts, according to the statement.

On Friday, CIRC barred Yao Zhenhua, chairman of Foresea Life Insurance, from the insurance industry for 10 years for irregular market operations.

CIRC chairman Xiang Junbo warned earlier this week that using insurance funds for short-term speculation and hostile takeovers in listed firms would be addressed without mercy. Endi