Regulators right to show no mercy to those speculating with insurance funds

ON FRIDAY, THE TOP INSURANCE REGULATOR REMOVED YAO ZHENHUA, chairman of Foresea Life Insurance, from his position and banned him from the insurance industry for 10 years for irregular market operations, after speculative purchases of stakes in listed companies including real estate giant Vanke and leading appliance manufacturer Gree. Beijing News commented on Saturday:

The China Insurance Regulatory Commission said in a statement that Foresea Life violated insurance regulations and provided false information about its increase in capital.

In fact, Yao is not alone in encroaching on bricks-and-mortar businesses at the risk of disrupting the capital market. In 2015 alone, nine insurers built up their stakes in some 31 listed companies, and seven insurance investors did the same with 14 listed companies last year. Some of them, the Baoneng Group included, of which Foresea Life is an affiliate, are suspected of fueling speculation in the market at the expense of small investors and threatening the management of public companies.