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Original Title: Regulatory Announcement of the Eight Insurance Fund Disorders, 5 Insurance Companies Investing in Real Estate in Violation of Regulations
Regulatory Notice of Eight Chaos in Insurance Funds
5 insurance companies illegally invested in real estate
⊙Reporter Huang Lei ○ Editor Yan Jian
In the recent “self-examination, self-correction and investigation of risks of illegal use of funds by insurance institutions”, the various degrees of problems existing in insurance companies have emerged. Recently, the China Insurance and Banking Regulatory Commission notified various insurance institutions of the top eight problems in the field of utilization of insurance funds.
There are two major problems in reporting
In this self-examination, the China Banking and Insurance Regulatory Commission concluded that most insurance companies can seriously conduct self-examination as needed and submit self-examination reports on time. However, there are also some insurance companies that do not pay enough attention, some do not submit self-inspection reports on time; some are not serious about self-inspection and do not report any problems or risks; some reports have incomplete items and obvious omissions.
Regarding the presentation of the report, the China Banking and Insurance Regulatory Commission pointed out two important issues.
First, the self-examination report was not submitted on time. Eastern Life Insurance and Harmony Health Insurance did not submit self-examination reports. Yi’an Property & Casualty Insurance, etc. you will need to submit a self-inspection report after the deadline.
Second, there are omissions in the self-examination report. China Post Life’s zero-trouble, zero-risk report is inconsistent with the supervisory-dominated situation; Huahui Life, Dingcheng Life and other problems and reasons for the rate of over-regulation of the use of funds not reported, there are obvious omissions; Bank of Samsung Life, Xinhua Pension, Self-examination report items such as Huahai property and casualty insurance, Yanzhao property and casualty insurance, Anxin property and casualty insurance did not complete the questioned amount.
The scope and investment ratio are above the red line.
According to the report, the “three meetings and one layer” (shareholders’ meeting, board, supervisors and senior management) of some insurance companies are not standardized. For example, 74 insurance companies did not establish investment directors in accordance with regulatory requirements, and the establishment of independent directors in 9 insurance asset management companies did not meet regulatory requirements. In addition, key departments are missing and internal control is weak. 4 real estate insurance companies have not created insurance asset management departments, 4 insurance companies have not carried out internal audits of the use of funds or have not carried out external audits on the internal control of the use of funds.
Even the majority shareholders of individual insurance companies circumvent the “three meetings and a level” by manipulating the general meeting of shareholders or the board of directors, establishing investment advisory committees, etc., and interfering with the use of insurance funds in violation of laws and regulations. The supervisory mechanism is obviously unbalanced.
At the level of investment practice, there are still insurance institutions that take risks. The first is investing beyond the regulatory arena. Six insurance companies invested directly in real estate or financial products without corresponding investment management capabilities. The types of investments abroad by individual insurance companies exceeded the scope of regulatory requirements. Second, the share of investment assets does not meet regulatory requirements. Individual insurance group companies have invested in non-financial companies or foreign entities that exceed the regulatory index.
In addition, the three insurance companies sometimes interfered with the normal performance of their duties by sending investment advice and prior written consent. There are also 26 insurance institutions that have not implemented third-party custody of all investment assets, including bank deposits. The business of “internal guarantees and external loans” of individual insurance companies does not meet regulatory requirements in terms of guarantee entities, use of funds and leverage ratios.
There is still stock channel business
In addition, the China Banking and Insurance Regulatory Commission also found in the investigation that there are still insurance companies illegally conducting transactions related to the use of funds.
Specifically, the scale and proportion of investment in related party transactions of 9 insurance companies did not meet regulatory requirements; The insurance funds of 4 insurance companies flowed illegally to related parties through mutual fund trust plans, equity investment funds and non-insurance subsidiaries. ; Some insurance companies provided collateral financing or guarantees for related parties in violation of regulations, and some insurance companies provided guarantees for foreign subsidiaries with corporate bank deposits; Project funds from 5 insurance companies were used by related parties for purposes other than those agreed to in the contract, and capital and income were not Carry out timely confirmation and compensation; When the ownership of the asset is unclear, payments are made to related parties and the real estate of related parties acquired by 3 insurance companies has not been transferred for a long time.
At the same time, the investment products of some insurance institutions face certain credit risks or payment difficulties. For example, unlisted capital, real estate projects, and equity funds invested by some insurance institutions cannot be withdrawn or redeemed as agreed in the contract, and they are not liquidated on schedule.
There are also certain hidden risks in the field of alternative investing. Individual insurance institutions did not use their own funds to make significant capital investments, and some did not comply with approval procedures for capital increases in subsidiaries; 7 insurance companies invested in capital real estate projects that had equity interests or related rights were not recovered after maturity; 5 Real estate project companies established by insurance companies are embezzled with mutual funds, external equity investments, shareholder loans from insurance companies that exceed regulatory requirements, etc .; real estate investment projects of 11 insurance companies did not start construction within the contractually agreed period or were not invested in Mortgage guarantees for real estate; the insurance funds of five insurance companies flow into the real estate sector in violation of regulations through direct investment or investment in financial products.
There is still an equity channel business for insurance asset management products. 4 insurance asset management companies issued channel-type portfolio products to make it easier for insurance companies to avoid monitoring related party transactions; individual insurance asset management companies transferred active management responsibilities, and investors or clients made investment decisions; individual insurance asset management companies Provide channel services for other financial institutions to avoid interbank business supervision.
Supervision will increase inspection efforts
The China Banking and Insurance Regulatory Commission stated that the special rectification work for risk investigation is an important measure for the supervision to fully understand the use of insurance funds and determine the risk base of the industry. Some insurance companies did not submit a full self-inspection report on time, indicating that the internal management of the company is not strict and compliance awareness is not strong. The named and notified insurance company must make a serious rectification, redo the self-inspection, and resubmit the self-inspection report before the end of September.
In the next step, the China Banking and Insurance Regulatory Commission will increase the intensity of external supervision and on-site inspections. For insurance institutions whose self-inspection reports still do not meet the requirements, as well as for insurance institutions whose rectification and reform have not been implemented, they will restrict the use of funds and insurance proportions in accordance with the law, and will order them to adjust the corresponding senior management personnel and other relevant regulatory measures.
