The CBIRC has said that it will set different requirements for different insurers on how much they can invest in equities.
China raised the equity investment cap for insurers to 45% of their total assets from 30% previously, to provide more long-term funds to the real economy and capital markets, reported China Daily.
For an insurer whose comprehensive solvency adequacy ratio was above 350% at the end of the previous quarter, the outstanding balance of its investments in equity assets should not exceed 45% of its total assets at the end of the previous quarter.
For another example, an insurer whose comprehensive solvency adequacy ratio was lower than 100% at the end of the previous quarter, however, the outstanding balance of its investments in equity assets should not surpass 10% of its total assets at the end of the previous quarter, and the insurer should immediately stop making new investments in equity assets.
Data from the CBIRC shows that the average comprehensive solvency adequacy ratio of insurers was 244.6% at the end of the first quarter.
However, it is difficult to say how much money insurance companies will inject into the capital markets in the short run because the companies have to go through a series of internal procedures and dispose of other types of assets before making large investments. More important, their senior management team must reach a consensus on the forecast that capital markets are rising, he said.