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China tightens rules for insurers; Zurich to buy Australian insurer

S&P Global Market Intelligence offers our top picks of insurance news stories and more published throughout the week. Please note that some entries may have links to third-party sources that may require a subscription.

China tightens investment rules for insurers

* China's insurance regulator is limiting the maximum share of insurers' investments in equities as a means of curbing aggressive moves by some unlisted players into stocks. The China Insurance Regulatory Commission will limit the maximum share of insurers' investments in equities to 30% of their total portfolio from the previous 40%, said Chen Wenhui, deputy chairman of the CIRC.

* The Chinese regulator may also revoke insurers' licenses if the companies violate investment rules by continuing to engage in aggressive takeovers and sales of universal life policies, said CIRC Chairman Xiang Junbo in an interview. Xiang noted that "insurance institutions should be friendly investors in the capital market, not eyebrow-raising savages."

* Meanwhile, the CIRC banned Evergrande Life Insurance Co. Ltd. from entrusted stock investment following the life insurer's frequent speculative trading of listed companies. The life insurer can only restart making equity investments after its corrective action report is approved by the regulator.

Zurich Insurance makes progress on Asian deals, other M&A news

* Taiwan's Financial Supervisory Commission approved Zurich Insurance Group Ltd.'s sale of a 99.73% stake in Zurich Insurance (Taiwan) Ltd. to Hotai Motor Co. The sale is valued at less than NT$6.9 billion.

* Australia's travel insurer Cover-More Group Ltd. agreed to a A$741 million takeover offer from Zurich Insurance Co. Ltd., a unit of Zurich Insurance Group. The board of Cover-More recommended that shareholders vote in favor of the scheme in the absence of a superior proposal.

* AMP Ltd. received regulatory approval to transfer its NMLA life insurance business in Australia and New Zealand to AMP Life Ltd.

* The leasing arm of Ping An Insurance (Group) Co. of China Ltd. is reportedly among the bidders for AirAsia Bhd.'s aircraft leasing unit. China Merchants Bank Co. Ltd.'s leasing arm is also said to be interested in the leasing unit, which is valued at about US$1 billion.

* Thai Reinsurance PCL unit Thaire Services Co. Ltd. sold its 30% stake in Per Asia Co. Ltd. due to the underperformance of the company's results.

* China Life Insurance Co. Ltd. agreed to acquire a 43.86% stake in China Petroleum & Chemical Corp.'s Sichuan to East China gas pipeline for 20 billion yuan.

In other news

* India's Competition Appellate Tribunal imposed penalties on National Insurance Co. Ltd., New India Assurance Co. Ltd., Oriental Insurance Co. Ltd. and United India Insurance Co. Ltd. for engaging in anti-competitive practices. The tribunal said the insurers manipulated the bidding process in regard to the comprehensive health insurance scheme initiated by the state government of Kerala.

* Moody's Japan K.K. upgraded the outlook on Mitsui Sumitomo Insurance Co. Ltd. to stable from negative mainly due to the company's improved profitability and improving capital base after the reduction in its capital due to the acquisition of MS Amlin Plc.

* Ping An Insurance (Group) plans to sell U.S. dollar-denominated bonds and borrow from offshore banks as it seeks to overcome funding issues amid government efforts to stem capital outflows.

* Fitch Ratings affirmed Muang Thai Life Assurance PCL's international and national insurer financial strength ratings at BBB and AAA(tha), respectively.

* Sumitomo Life Insurance Co. plans to raise ¥105 billion via the issuance of unsecured subordinated notes in three tranches.

Featured on S&P Global Market Intelligence

South Korean insurers bracing for new accounting rule, readying capital: Capital raising across the insurance sector in South Korea is expected to accelerate in 2017 as local insurers prepare for an accounting rule change to be implemented in 2021. The new rule, known as IFRS 17, is set to be unveiled by the end of the 2017 first quarter.