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Chinese insurance companies can now invest more and widely in enterprise bonds, according to a newly issued regulation by the China Insurance Regulatory Commission (CIRC).
The investment scope was extended from enterprises belonging to the central government to those which have over AA credit appraisal. The ratio of the investment by insurance companies rose from the current 10 percent to 20 percent of the enterprise' total assets.
In recent years, China's insurance industry developed quickly, accumulating a large sum of insurance capital. In the first quarter of 2003, China's premium revenue surpassed 114.89 billion yuan (US$14 billion), up 32.69 percent compared with the corresponding period of last year.
The surplus of insurance capital passed 629.1 billion yuan (US$78 billion) by the end of March, up 49.23 billion yuan (US$6.1 billion) compared with the end of last year.
The control-loosening regulation will enable insurance capital to be more abundant in bond investment and reduce some risk. The regulation will also promote the development of the surging bond market, according to an official with the CIRC.
(Xinhua News Agency June 3, 2003)
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