Insurers to face tighter scrutiny

China's insurance regulator has stepped up the regulation of insurers' assets and liabilities by releasing a new set of rules, aiming to reduce the sector's exposure to risky assets and curb potential liquidity risk resulting from aggressive business strategies.

The new rules, which are subject to a one-year trial period, include performance and capability assessment of insurers through a rating system and a requirement for insurers' asset-liability condition and management reports, according to the China Insurance Regulatory Commission, or CIRC.

"The complicated interest rate environment and intensified industry competition has led to greater risks as insurers are facing rising volatility in their investment returns and relatively rigid cost for their liabilities," said Jia Biao, deputy director of the department of insurance fund operation at the CIRC.