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Insurance risks likely to be curbed further

China will restrict the business activities of insurers with low asset liability management capabilities in a bid to address risks in the sector, according to the country's insurance regulator. Insurance companies will be rated from A to D by the regulator based on their ability to ensure the matching of maturity, cash flow and cost on both sides of their balance sheets, and those with low ratings will be banned from certain investment activities, according to draft rules released by the China Insurance Regulatory Commission. Companies with a D rating, the lowest, will be banned from launching new products for a certain time. Salaries of the top management of these firms will also be restricted. Insurers with high ratings will be able to use their funds more freely.

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