China insurance regulator relaxes rules on infrastructure investment to aid economy

By: |
Shanghai | Updated: July 04, 2016 8:19 AM

China's insurance regulator has revised rules to make it easier for insurance companies to invest in infrastructure projects in a bid to support a slow economy and create investment opportunities in an environment of low returns.

chinaThe CIRC said that since 2006, insurers have invested a total of 893.83 billion yuan ($134.32 billion) into infrastructure projects, but rules needed to be revised to reflect changes on the ground. (Reuters)

China’s insurance regulator has revised rules to make it easier for insurance companies to invest in infrastructure projects in a bid to support a slow economy and create investment opportunities in an environment of low returns.

Insurers will no longer need to obtain regulatory approval to invest in infrastructure, and their scope of investment will also be expanded, the China Insurance Regulatory Commission (CIRC) said on its website on Sunday.

The CIRC said that since 2006, insurers have invested a total of 893.83 billion yuan ($134.32 billion) into infrastructure projects, but rules needed to be revised to reflect changes on the ground.

Currently, insures can only invest in infrastructure in five industries including transportation, telecommunications, energy, municipal projects and environmental protection.

The move would “satisfy insurers’ need to allocate their assets, to relieve their pressure in the current low-yield environment where there’s a shortage of quality assets,” CIRC said in a statement, adding it would also “support and stabilize the economy.”

The revised rules also introduced more risk-management measures, and regulators will give the market more power in allocating insurers’ money into infrastructure projects, according to the CIRC.

Do you know What is ? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Smart tips for buying a comprehensive health insurance plan amid pandemic
2Life Insurance: How nominees can easily process Death Claim Settlement
3Senior citizen health insurance Vs Regular health plans: Which is better for senior citizens?