CBIRC Issued Rules on Asset and Liability Management for Insurers
CBIRC issued interim supervisory rules on asset and liability management for insurers. The interim rules will promote insurance companies’ capability in asset and liability management and prevent the risk of asset-liability mismatch. The rules will help guide the transformation and prudent asset allocation of the insurance industry to promote development of the industry. These rules shall come into force as of the date of promulgation.
The term "insurance company" as used in these measures refers to the personal insurance company and property insurance company established in accordance with the law in China. Additionally, the term "insurance asset and liability management" refers to the process of the insurance company's continuous formulation, implementation, monitoring, and improvement of assets and liabilities related strategies under risk appetite and other constraints. The interim rules consist of 37 articles in five chapters:
- Chapter I on general provisions mainly specifies the purpose of formulating the rules, scope of application, definition of asset and liability management. It also defines the relevant responsibilities and establishes a supervisory mechanism that combines asset and liability management and links different levels of supervision.
- Chapter II sets out specific requirements for insurance companies to improve asset and liability management, in aspects such as organizational structure, control process, models and tools, performance appraisal, and management reporting. It also specifies rules on capability appraisal and quantitative assessment for insurance companies that correspond to the requirements of enhancing asset and liability management.
- Chapter III mainly lays down the methods of supervisory assessment of asset and liability management.
- Chapter IV specifies supervisory measures, explaining that differentiated supervision will be carried out on insurance companies based on their asset and liability management capabilities.
- Chapter V sets out the supplementary provisions, including supervisory policies governing asset and liability management of insurance groups, reinsurance companies, and pension companies that do not engage in insurance business.
Related Links
Effective Date: August 07, 2019
Keywords: Asia Pacific, China, Insurance, Asset and Liability Management, ALM, CBIRC
Featured Experts
Gavin Conn
Experienced life actuary; background in economic capital modeling; ALM specialist; IFRS 17 researcher
Scott Dietz
Scott is a Director in the Regulatory and Accounting Solutions team responsible for providing accounting expertise across solutions, products, and services offered by Moody’s Analytics in the US. He has over 15 years of experience leading auditing, consulting and accounting policy initiatives for financial institutions.
Karen Moss
Senior practitioner in asset and liability management (ALM) and liquidity risk who assists banking clients in advancing their treasury and balance sheet management objectives
Previous Article
ISDA Publishes Update on Global Interest Rate Benchmark ReformsRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.