December 13, 2016 / 8:44 AM / 3 years ago

China regulator says insurers should not be capital market "savages"

SHANGHAI, Dec 13 (Reuters) - The chairman of China’s insurance regulator said on Tuesday that the country’s insurers should be long-term money providers and not short-term capital market “savages”, according to a notice posted on the authority’s 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 that could lead to a sudden tightening of liquidity in the event of market volatility.

“Becoming a friendly player in capital markets should not allow insurers to become hateful savages, and also should not allow insurance capital to become a nightmare for capital markets,” said Xiang Junbo, chairman of the CIRC.

On-site inspection should be strengthened, especially in relation to insurance firms who have a “quick-buy, quick-sell” attitude to stock investment, Xiang added.

The CIRC must strengthen asset and liability matching regulation, said Xiang.

Last week, on Monday, China’s blue-chip index posted its biggest drop in six months after the top securities regulator warned against “barbaric” share acquisitions. (Reporting by Engen Tham; Editing by Himani Sarkar)

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