China’s insurance regulator recruits externally to boost solvency supervision

China’s top insurance regulator is turning to outside veterans to strengthen solvency management as it moved from a scale to risk-oriented system amid the rapid growth of the sector

2-MIN READ2-MIN

China’s insurance regulator is looking beyond its doors for external experts to help it boost its solvency risk management and rein in insurers that have veered towards higher risks businesses for quick returns. Photo: Reuters

Published: 4:47pm, 31 May 2017Updated: 10:14pm, 31 May 2017

China’s top insurance regulator is turning to external veterans to set up a new solvency supervision experts consulting panel, another sign to further beef up risk management capabilities amid the rapidly growing sector.

The new committee is charged to advise the regulator on pressing insurance solvency issues, monitor development of international practices, and provide support to international exchange and cooperation, as well as participate in the regulator’s inspection and evaluation of Chinese insurers, the China Insurance Regulatory Commission said on its website on Wednesday.

The recruitment is open to qualified experts from the academic, corporate and government backgrounds.

China has already shifted to a risk-oriented solvency system since 2016 from a previous scale-oriented one, to boost capital requirements, risk management and transparency among insurers. CIRC also aims to bring China in line with comparable global standards.

The CIRC has laid out the recruitment criteria on its website and priority would be given to candidates who are below 45 years old and can work independently in English. Photo: SCMP handout

“The new panel indicates that the regulator is attaching greater importance to outside forces in helping it strengthen solvency supervision,” said Zhong Ming, an insurance professor at Shanghai University of Finance and Economics.

“The risk-oriented solvency framework itself is borne out of drawing on the experiences of others.”

Under China’s risk-based capital regime known as C-ROSS, insurers which manage risks better adhere to less stringent capital requirements, and vice-versa.