Easing insurance risk

Source: Xinhua | 2017-06-21

TO contain risk in the financial sector, China’s insurance regulator has issued a draft of rules to standardize insurance businesses and cushion against credit risks.

Insurers that offer protection against credit risks may have a core solvency adequacy ratio of at least 75 percent in the most recent quarter, while their comprehensive solvency adequacy ratio should stay above 150 percent, according to the draft released by China Insurance Regulatory Commission. Companies that fail to meet the requirements should stop offering new insurance on credit risks. Insurance companies will also be prohibited from offering credit risk insurance to companies rated AA or lower. The draft is currently open for revision, and the public will have until Sunday to provide opinions.