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Report: China tightens issuance of new insurance licenses

The China Insurance Regulatory Commission is tightening its issuance of new licenses to insurers amid concerns over the aggressive business and investment practices of some insurers, Reuters reported Dec. 22, citing "three people with knowledge of the matter."

The commission is not expected to issue too many licenses to insurers in the near-to-medium term despite a backlog of applications, one of the people said. The move aims to reduce risks from insurers' asset purchases and trading conduct and comes as the regulator focuses on new solvency rules and its requirements to have higher capital buffers and stronger risk controls for existing insurers.

Earlier, the regulator issued stricter rules regarding insurers' investments. It also recently banned Evergrande Life Insurance Co. Ltd. from entrusted stock investment following the life insurer's frequent speculative trading of listed companies.

The regulator did not respond to Reuters' faxed request for comment.