China's insurance regulator has launched a new classification and supervision system for insurance companies and agencies, the industry watchdog said in a statement on Jan 4.
As of Jan 1, the new system, which is aimed to tighten the management of insurers, particularly those with poor corporate governance, divides them into four categories, "A", "B", "C" or "D", which will be regulated by different levels.
The companies rated as "D" refer to the ones with serious problems on payment, or high risks on corporate governance, capital management or market behavior.
For this type, the China Insurance Regulatory Commission (CIRC) will take very strict measures and may even take over the company, said the statement.
The monitoring index for insurance companies includes payment capacity, corporate governance, internal control and a set of risk indicators. Insurance agencies are classified based on compliance and stability.
(China Daily January 5, 2009)
