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Chinese regulator mulls rule revisions for insurance security fund

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Chinese regulator mulls rule revisions for insurance security fund

The China Insurance Regulatory Commission is mulling revising its insurance security fund rules, China Daily reported Dec. 13, citing a report from local business newspaper Shanghai Securities News.

Under the revised draft rules, insurers will be required to submit a certain proportion of capital to the fund based on an assessment of their risk management capability, which could likely result in higher capital requirements for some insurers.

The regulator will also allow the fund to provide capital support to insurers in times of a liquidity crisis. Insurers can acquire up to 15% of the outstanding value of the fund in the previous year as capital for liquidity support, the report said.

Industry experts noted that the move reflects the CIRC's intention to enhance the role of the insurance security fund in preventing industry risks, as some insurers may be exposed to liquidity problems following substantial tightening of rules by authorities as part of moves to curb systemic financial risks.

The regulator is soliciting industry opinion for the draft rule revision and did not reply to the publication's queries on the matter, China Daily added.