SHANGHAI, Sept 7 (Reuters) - China’s insurance regulator launched new rules on Tuesday to curb the growth of short- and mid-term life insurance products, according to a notice posted on its official website.
The China Insurance Regulatory Commission (CIRC) has been trying to reduce risks from insurers investing in stocks and long-term assets using short-term funds which could lead to a sudden tightening of liquidity in the event of market volatility.
The new rules say that at the end of the latest quarter, the annual insurance premiums from short- to mid-term products should be less than 2 times the greater of an insurer’s invested capital or net assets.
The rules also specify that annual insurance premiums for products with terms between 1 and 3 years should only comprise 50 percent of an insurer’s total premiums by 2018.
Higher pay-out rates were also set for life insurance and personal care insurance among other things, the rules said.
Certain types of liability, such as disease and accidental death liability, should now be included in death insurance.
$1 = 6.4659 Chinese yuan Reporting by Engen Tham; Editing by Kim Coghill