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Wu Dingfu, chairman of the China Insurance Regulatory Commission (CIRC), the nation's top insurance industry regulator, pointed out that the overall listings would help the two financial groups resist market risks, integrate resources, and realize sustainable development.
Wu suggested the reform of the nation's insurance industry should attach more importance to the management of insurers and the modern mechanisms for insurers.
And he stated that the CIRC prefers strategic investors to be insurers' shareholders, but not financial investors. Because the insurance period is always very long, shareholders of insurers should be able to finance the insurers for a long term. In addition, shareholders should help insurers enhance their management ability, including management over insurance businesses and insurance firms' internal governance. Therefore, strategic investors are more suitable than financial investors to be insurers' shareholders.
Wu also disclosed that the CIRC would take measures to deal with those insurers who still cannot catch up with the nation's requirement for insurers' solvency although they have made utmost effort to fulfill the goal. Poorly-performing life insurers will be merged and non-life insurers and other insurance intermediaries can be acquired or asked to withdraw from the market.
Moreover, Wu said that the insurance regulator welcomes those big domestic banks or companies to invest into the nation's insurance industry.
Then the chairman disclosed that investment-linked insurance products are designed for the marketization of premium rate. But many insurers are now capturing larger market share and enlarging business size just for the profitability. Therefore, the CIRC itself will take action to manage the nation's investment-linked insurance market.
For instance, the watchdog might provoke a higher requirement for the solvency of investment-linked insurance products, reduce the capital that is used by such products, or make a stricter requirement for qualifications of salespersons.
Recently, many people are questioning the salary of top executives of state-owned insurers. As for the question, Wu said that the salary could be a little high if those top executives do make efforts and create great amount of value, but it cannot be far from the nation's current situation.
(USD 1 = CNY 6.84)
From www.cnstock.com, Page 1, Thursday, September 04, 2008 info@SinoCast.com
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