CHINESE INSURERS NOW SECOND-LARGEST INSTITUTIONAL INVESTOR

Insurers have become the second-largest group of institutional investors in Chinese securities after just eight years of trading. Only commercial banks hold more securities. By the end of 2005, insurers had invested directly a total of 15.89bn yuan, despite being restricted to a cap of 20% of their total assets. A report from the People’s Bank of China on the country’s financial situation, published on Monday, said that the reform of the country’s insurance industry had made great progress. The report also suggested speeding up the establishment of a deposit insurance system, under which insurers would provide back-up to financial institutions in the even of a liquidity crunch.