China has changed rules for managing state bailout funds to bail out troubled insurers, its financial regulators said on Thursday.
The rules aim to promote the insurance industry's healthy development, prevent and resolve financial risks, and maintain financial stability, the China Banking and Insurance Regulatory Commission said in a statement on its website.
China Insurance Security Fund Co Ltd, which played a key role in rescuing Anbang Insurance Group Co Ltd, can participate in the formulation of risk elimination plans under the new rules. The rules, published jointly by the country's central bank, banking and insurance regulator and the Treasury, come into effect on December 12.
The company operates rescue funds that provide funds to bail out policyholders and liquidate troubled insurers. The funds will be used in other scenarios approved by the State Council, China's cabinet, under the rules, without giving further details.
The economy has slowed this year as it was hit by tough COVID-19 restrictions, a deepening housing crisis and weaker demand. In response to the slowdown, regulators pledged to contain financial risks.
shareholders and management must also cooperate with the authorities in winding up an insurance company with the support of the funds, the rules say.
The new rules also adjust the cash cap that insurance companies must provide to supplement funds.