CHINESE INSURERS WILL NEED NEW INTERNAL AUDITING SYSTEM

The Chinese Insurance Regulatory Commission (CIRC) will soon issue new rules requiring insurers in China to establish internal auditing systems, reports official publication Financial News today. The CIRC has already begun asking insurers for opinions on the draft rules, which will also introduce new regulations on subsidiaries, risk management and the appointment of independent directors. The new rules would complement the guidelines issued earlier this year by the CIRC on the overall operation of insurers in China. Xinhua reported that independent directors would be required to advise on any transactions with subsidiaries that exceeded 1% of the insurer’s net asset value. The power and responsibilities of independent directors would be enhanced in other areas, permitting the directors to liaise directly with the CIRC if issues arose that could harm the insurer’s interests.