BEIJING, April 28 (Reuters) - China’s insurance regulator on Friday vowed to improve its conduct and bring the market back to order after its chairman was placed under investigation and removed from his post for “serious disciplinary violations”, a euphemism for corruption.
The China Insurance Regulatory Commission (CIRC) said in a posting on its website it had to reflect deeply on the bitter lessons of the actions of its former chairman, Xiang Junbo, who was placed under investigation on April 17.
Xiang’s actions had seriously weakened the “authoritativeness and credibility” of the government’s oversight, the commission said in an unusually strongly worded statement.
“From start to finish, we will persevere in being clean, in not being ensnared by financial titans and those we oversee; we will not be dragged down by rule breakers, will not collude with the outside,” it said.
In recent months, the CIRC has vowed to crack down on “barbaric” insurance companies to prevent the sector becoming a “club of the rich” or a “hideout for financial titans”.
President Xi Jinping called on Tuesday for increased efforts to ward off systemic risks to help maintain financial security.
Leaders have pledged to address financial risks and asset bubbles which analysts say pose a threat to the world’s second-largest economy if not handled properly.
The insurance regulator has begun to tighten control over short- and mid-term life insurance products, in a bid to curb risks from aggressive insurers investing heavily in stocks and long-term assets using short-term funds.
The CIRC also said it would restore market order by further supervising companies, containing “extreme” investment and bringing “inappropriate” product innovation under control.
Insurance companies should acknowledge their problems and take responsibility for restoring market order, it said, adding that companies that “go through the motions”, conceal information, leak information or fail to sufficiently reform will be held accountable. (Reporting by Christian Shepherd; Editing by Robert Birsel)