CHINESE REGULATOR WARNS AGAINST “RECKLESS” INVESTING

A senior official at Chinese regulator CIRC has warned that locally based insurers are risking their business by investing recklessly in the domestic stockmarket, thereby fuelling a bubble that has seen the stock index double this year. Li-Kemu, vice-chairman of the China Insurance Regulatory Commission (CIRC) said that the boom in the stockmarket had led to many insurers focusing on their investments rather than on their underwriting skills. “In the last two years, insurance companies have made huge gains from their investment portfolios ... so much so that their portfolios have become the main source of their profits”, said Mr Li. He said that insurance firms were not fund managers and that they should focus instead on the actuarial soundness of their products.