China takes down insurance regulator, capping a year-long industry shake-out

The Chinese Communist Party’s corruption watchdog has put insurance regulator Xiang Junbo under investigation for violating party discipline, in a takedown that caps a year-long shake-out of the country’s financial services industry.

His fall from grace follows the government’s intervention last year into madcap corporate raids financed through insurers’ high-yielding products, an aspect of financial liberalisation that went awry and roiled corporate China under Xiang’s watch.

“Insurance should be a dull and boring business: take in premiums to pay claims,” said Fraser Howie, director of Newedge Financial in Singapore. “The assets under management need to be stable and grow steadily over time. Yet some insurers seem to act like super-aggressive venture capital firms. That seems a high-risk strategy.”

Xiang, 60, holds a doctorate in law. A discharged soldier, he saw battlefield action and was wounded during China’s 1979 military invasion of Vietnam.