It clarified the three-pillar framework for the industry.
The Chinese Banking and Insurance Regulatory Commission (CBIRC) has revised its solvency regulations for insurers effective 1 March, according to a statement.
The updated regulations aim to bolster solvency supervision and consumer protection, and clarify the three-pillar framework consisting of capital requirements, qualitative regulatory requirements, and market restraint mechanisms.
Under the new solvency regulatory framework system, indicators will comprise the core solvency adequacy ratio, comprehensive solvency adequacy ratio, and comprehensive risk rating.
CBIRC has also strengthened the main responsibility of insurers' solvency management, which requires them to build a solvency risk management organisational structure, establish a complete solvency risk management system and mechanism, and formulate a three-year rolling capital plan.
In addition, insurers should disclose the summary of the quarterly solvency reports and provide clients and shareholders relevant links of daily operations.
For insurers that do not meet the solvency standard, the regulator shall take targeted measures in accordance with the insurer’s risk causes and degree of risk, and divide the regulatory measures into mandatory measures based on their risks.
Do you know more about this story? Contact us anonymously through this link.