Beijing, 9 Sep (ZXS) -- China's State Financial Regulatory Administration issued the "Notice on Optimizing the Solvency Regulatory Standards of Insurance Companies" on 10 September, which optimizes the solvency regulatory standards of insurance companies in accordance with the actual development of the insurance industry on the basis of keeping the regulatory standards for the comprehensive solvency adequacy ratio of 10 percent and the core solvency adequacy ratio of 100 percent. It is proposed to guide insurance companies to support the stable and healthy development of the capital market.
The Circular differentiates the minimum capital requirement. Property insurance companies and reinsurance companies with total assets of more than RMB100 billion (RMB, the same below) and RMB2000 billion, as well as life insurance companies with total assets of RMB500 billion and RMB5000 billion, are required to calculate the solvency adequacy ratio at 95% of the minimum capital; For property insurance companies and reinsurance companies with total assets of less than 100 billion yuan, and life insurance companies with total assets of less than 500 billion yuan, the solvency adequacy ratio is calculated according to 90% of the minimum capital.
In terms of guiding insurance companies to return to the source of protection, the Circular increases the proportion of future surpluses of insurance companies' policies with a remaining maturity of more than 10 years into the core capital from no more than 35% at present to no more than 40%, encouraging insurance companies to develop long-term protection products.
The Circular proposes to guide insurance companies to support the stable and healthy development of the capital market. For insurance companies investing in CSI 300 index constituents, the risk factor is adjusted from 0.35 to 0.3, and for investing in ordinary stocks listed on the Science and Technology Innovation Board, the risk factor is adjusted from 0.45 to 0.4. For investments that are not penetrated in publicly offered infrastructure securities investment funds (REITs), the risk factor is adjusted from 0.6 to 0.5. Insurance companies are required to strengthen the long-term assessment of investment returns, and publicly disclose the average investment rate of return and comprehensive investment return in the past three years in the summary of the quarterly solvency report.
The Circular also requires insurance companies to be guided to support technological innovation. The equity of unlisted companies in national strategic emerging industries invested by insurance companies has a risk factor assigned to 0.4. Technology insurance operated by insurance companies applies the property insurance risk factor to measure the minimum capital, and the solvency adequacy ratio is calculated at 90%. (End)