Regulator revises measures for insurance security fund

The China Banking and Insurance Regulatory Commission announced on Thursday it has revised measures for the administration of the insurance security fund, which will come into effect on Dec 12.

The CBIRC revised the previous measures together with the Ministry of Finance and the People's Bank of China, the central bank. The regulator said it will give further play to the role of the insurance security fund in preventing and mitigating financial risks to promote the stable and high-quality development of the insurance sector.

According to the revised measures, the CBIRC will replace the current flat rate system of the insurance security fund with a risk-oriented rate system, in which the rates are composed of base rates and risk-based rates.

At present, a property insurance company is allowed to suspend contributions to the insurance security fund if the company's contributions amount to 6 percent of its total assets. A life insurance company is allowed to suspend contributions to the fund if the company's contributions have reached 1 percent of its total assets.

Adopting the new measures, however, the CBIRC has decided to set the bar at 6 percent of total assets of the property insurance sector and 1 percent of total assets of the life insurance sector.