SHANGHAI (Reuters) - China’s insurance regulator has suspended Foresea Life, a unit of financial conglomerate Baoneng Group, from selling “universal life” products until it addresses problems in its management of customer accounts and information.
Foresea Life has been aggressively wresting market share from bigger, listed peers by offering investors guaranteed-return, higher yielding products.
It has built up stakes in a number of firms and played a key role in the takeover battle for China Vanke 2202.HK000002.SZ, funding a quarter of Baoneng's 25 percent shareholding in the leading property developer.
The China Insurance Regulatory Commission (CIRC) said on its website late on Monday that it had found problems during an inspection of the firm in May and had asked the company to fix them.
It said it had decided to suspend Foresea Life with immediate effect after receiving a report from the company on Dec. 1 which showed that the firm had failed to make adequate changes.
“Your firm should conscientiously improve customer service, strengthen risk monitoring and response to maintain company stability,” the CIRC said in the statement addressed to the firm.
A Foresea Life executive declined to comment.
“Universal life” products - life insurance policies combining death benefits and an investment element - account for 90 percent of the company’s premium income.
The company had suspended new business at its “universal life” unit and had set up a team to respond to the regulator’s requests, the Securities Times newspaper reported.
China’s top securities regulator on Monday condemned “barbaric” share acquisitions by some asset managers, leading shares in Gree Electric and China Vanke to tumble.
Reporting by Brenda Goh; Additional Reporting by SHANGHAI Newsroom; Editing by Stephen Coates
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