Rules for insurance investment abroad
(Reuters)
Updated: 2006-10-11 14:51 China will soon issue new regulations allowing
domestic insurance firms to invest the foreign exchange they can now buy in
overseas markets, the country's insurance regulator said on Wednesday.
The authorities would tweak current rules to include the changes as a
way of broadening the investment scope for the nation's cash-flush insurers,
said China Insurance Regulatory Commission Vice-Chairman Li Kemu.
"We are currently drafting provisional rules on the use of foreign exchange
by insurance companies to invest abroad," he told a news conference.
"We have been working closely with the foreign exchange regulator
recently...we hope the new rules can help (insurance firms) to expand
investments on the markets," he said.
Beijing said earlier this year that insurance firms could apply to the
foreign exchange regulator to purchase overseas currencies that they could to
invest abroad.
But insurers have said the government needs to issue detailed rules to allow
them to actually invest overseas.
So far, no Chinese insurer has invested in overseas capital markets, with the
exception of a handful of government-backed deals through which China Life and
others have participated in the overseas listings of major Chinese banks.
Li did not give any details on the new regulations, which will also allow the
regulator to strengthen investment risk controls.
The Chinese government is encouraging two-way flow of capital between the
mainland and overseas securities markets through institutional investor schemes,
as it tries to control foreign currency inflows while developing its fledgling
capital markets.
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