Advertisement
Advertisement

More options for insurers

The mainland insurance regulatory chief has asked the industry to study the feasibility of issuing subordinated debt to shore up capital ratios.

Last month, domestic banks were allowed to issue subordinated debt, which pay higher interest rates than other types of debt. But in the case of bankruptcy, holders of the debt receive payment only after senior debt claims are paid.

State media yesterday quoted China Insurance Regulatory Commission chairman Wu Dingfu as saying insurers would be gradually given a broader range of investment options as the market developed. A key change would be permission to directly invest in equities and the prospect of investing in overseas bond markets.

At present, insurers are allowed to buy stocks only through fund managers, with their holdings capped at no more than 15 per cent of their funds. Overseas investment is forbidden.

Earlier, Mr Wu said the commission had begun a feasibility study on allowing mainland insurers to invest in overseas bond markets.

Post