Capital misuse threat to insurers

PUBLISHED : Friday, 19 December, 1997, 12:00am
UPDATED : Friday, 19 December, 1997, 12:00am

China's fledgling insurance industry is at risk from underwriters illegally using funds to play stock markets or give out loans, an editorial says. 'Some insurance companies misappropriate or misuse capital funds, with some insurance companies using their capital as loans or to speculate in stocks,' the People's Daily editorial said. Such actions had led to a loss of insurance capital and weakened the ability of insurance companies to make payments on policies, the newspaper said. It urged financial watchdogs to tighten supervision. The central bank recently took over a property branch of the Yong An Insurance Co in Shaanxi because of its misuse of capital, it said.