Domestic insurance group companies will usher in "penetrating" supervision. On September 5, a reporter from Beijing Commercial Daily was informed that the China Banking and Insurance Regulatory Commission recently issued the "Measures for the Supervision and Management of Insurance Group Companies (Draft for Comment)" (hereinafter referred to as the "Draft for Comments") to strengthen risk management of insurance groups and raise the threshold for entry ”, 11 “shoulds” for risk management have been formulated, and at the same time, the supervision of non-insurance subsidiaries has been improved.
In response, industry insiders pointed out that this revision is an objective requirement and realistic need for the insurance industry to strictly supervise and prevent risks. The newly revised management measures are conducive to strengthening the supervision and risk prevention and control of insurance group companies, improving and enhancing the service quality of the insurance industry, and realizing the high-quality development of the insurance industry.
The “threshold” of access is raised and 11 “shoulds” are proposed for risk management.
The so-called insurance group company refers to the establishment of legally registered and approved by the China Banking Regulatory Commission, with the words “insurance group” or “insurance holding” in its name , A company that exercises control, joint control or significant influence on member companies of an insurance group.
The "Draft Opinions" shows that the establishment of an insurance group company can adopt two methods: initiation and establishment by renaming. At present, there are 13 insurance (holding) groups in China. In order to effectively prevent the operating risks of the insurance group , the "Draft Opinions" strengthened the risk management of the insurance group. From establishment and licensing to risk management, new conditions for the establishment of insurance group companies have been added, and 11 “shoulds” have been drawn up to effectively control the risks that companies may face.
Among them, the new conditions for the establishment of an insurance group company include continuous profitability for the last three fiscal years, core solvency margin ratio for the last four quarters not less than 75%, and comprehensive solvency margin ratio not less than 150%, The comprehensive risk rating of the most recent 4 quarters shall not be lower than Class B and other regulations.
Capital University of Economics and Business Deputy Director of the Insurance Department Li Wenzhong believes that this is the need to strengthen the supervision of insurance group companies and prevent financial risks. Regardless of whether it is initiated or renamed, the establishment of an insurance group company will generally cause an increase in the internal liabilities of the entire insurance group, resulting in a consumption of capital.Therefore, the establishment of an insurance group company puts higher requirements on the solvency of insurance institutions controlled by investors, which helps to ensure the adequacy of the solvency of the various institutions within the insurance group company and effectively control the risks arising therefrom.
In addition, the "Draft Opinions" also added that insurance companies that initiate or change their names must submit anti-money laundering materials and material authenticity statements. In this regard, Li Wenzhong said: “The addition of anti-money laundering materials guarantees the need for the legality of funding sources for the establishment of insurance group companies; the addition of a statement of authenticity of the materials can further clarify the responsibilities of applicants for establishing insurance group companies and strengthen the constraints on applicants. To ensure the authenticity of the application materials. This is also the need to prevent risks and ensure financial security."
In the "Risk Management" chapter added to the "Draft Opinions", in terms of risk management, the newly drafted "should" includes the establishment 11 risk management departments independent of business departments, requiring the establishment and improvement of firewall systems, etc., have also made corresponding requirements for stress testing and risk appetite systems.
Regarding the content of the insurance group company's risk management plan, Li Wenzhong believes: "Ensure that risk management can run through all aspects of group operations and be implemented in all aspects of group operations, which is conducive to the realization of all-weather and comprehensive management of risks."
Equity structure can penetrate and improve the management of non-insurance subsidiaries
The "Opinion Draft" strengthens the risk management supervision of insurance group companies, and also improves the management system of non-insurance subsidiaries. The addition of "non-insurance subsidiary management" draws up insurance The scope and relevant conditions of the group's investment in non-insurance subsidiaries.
Then, which non-insurance subsidiaries can an insurance group company directly or indirectly invest in? The "Draft Opinions" pointed out that the specific types include shared service subsidiaries that provide information technology services, auditing, policy management, catastrophe management, property management and other services and management for member companies of insurance groups; other non-insurance subsidiaries established by major equity investments Company etc.
The "Draft Opinions" stipulates that insurance group companies and their insurance subsidiaries shall not provide guarantees for the debts of non-insurance subsidiaries, and shall not provide loans to non-insurance subsidiaries, unless otherwise stipulated by the China Banking and Insurance Regulatory Commission. Insurance group companies and their insurance subsidiaries cannot invest in non-insurance subsidiaries by assuming joint liability for the debts of the invested enterprise.
In addition,It also requires that the level of equity control between an insurance group company and its financial subsidiaries shall not exceed three levels in principle, and the level of equity control between an insurance group company and its non-financial subsidiaries shall not exceed four levels in principle.
"For a group, the more levels it has with its subsidiaries, the greater the loss of information transmission, it is difficult to achieve effective penetrating supervision, and it is easier to form the accumulation and hiding of risks, and the greater the number of financial subsidiaries "Li Wenzhong said.
The "Draft of Opinions" makes multiple requirements for non-insurance subsidiaries. For example, insurance group companies and their insurance subsidiaries directly or indirectly invest in non-insurance subsidiaries should be conducive to optimizing group resource allocation, exerting synergies, and enhancing the group The overall level of specialization and market competitiveness have effectively promoted the development of the main insurance business. Investment in a non-insurance subsidiary shall follow the principle of substance over form, and investment carried out by an insurance group company or its insurance subsidiary shall not evade supervision in the form of indirect investment through established non-insurance subsidiaries in violation of regulations.
Why is the management content of non-insurance subsidiaries added? Li Wenzhong pointed out: "First of all, this requirement is conducive to the concentration of insurance group companies to do a good job and strengthen the insurance business, so that the'insurance group company' can be worthy of its name. Secondly, this requirement can effectively prevent financial risks. Insurance group companies have laid out their business areas. On the one hand, it is unavoidable that there will be regulatory loopholes that hide risks and make it difficult for the state to require supervision of all financial businesses. In addition, it may also cause regulatory arbitrage and unfair competition."
Introduced in 2010 The "Administrative Measures for Insurance Group Companies" has been trialed for 11 years. The China Banking and Insurance Regulatory Commission stated that in order to strengthen the supervision and management of insurance group companies, effectively prevent the operating risks of insurance groups, and promote the healthy development of the financial and insurance industry, and in accordance with the principle that substance is more important than form, it has issued the "Draft Opinions." The "Draft of Opinions" will implement comprehensive, continuous and penetrating supervision and management of insurance group companies.
Regarding this revision, Li Wenzhong said: “Corporate governance has always been the focus of the insurance industry’s risk prevention. This revision is an objective requirement and realistic need for strict supervision and risk prevention in the insurance industry. The newly revised management measures are conducive to strengthening the The supervision and risk prevention and control of insurance group companies will improve and enhance the service quality of the insurance industry and realize the high-quality development of the insurance industry.”
Based on feedback from all walks of life, the "Draft of Opinions" was further revised and improved and released and implemented in due course.
Beijing Commercial Daily reporter Chen Tingting Trainee reporter Hu Yongxin
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