CBIRC published a notice on "participation of insurance funds in credit risk mitigation tools and credit protection tools." Credit risk mitigation tools and credit protection instruments referred to in this notice refer to credit derivatives used to manage credit risk. The notice aims to allow and regulate the participation of insurance funds in the business of credit derivatives. It is intended to further enrich the use of insurance funds and provide hedging measures for credit risk management.
The notice defines the purpose of participation. It is stipulated that the participation of insurance funds in the credit derivative products business is limited to hedging risks and may not be used as a credit risk-bearer. The notice also provides clarification regarding the qualifications of the participants. The insurance institutions need to have the ability to use derivatives and credit risk management capabilities to participate in the credit derivatives business. The notice mentions that insurance institutions should formulate corresponding management systems and operational procedures, monitor and regularly assess risks, and submit monthly, quarterly, and annual reports to CBIRC.
Related Links (in Chinese)
Keywords: Asia Pacific, China, Insurance, Credit Derivatives, Credit Risk Mitigation Tools, Credit Risk, Hedging, CBIRC
Previous ArticleEBA Report Assesses Regulatory Framework for Fintech Activities
The European Banking Authority (EBA) published the final guidelines on the monitoring of the threshold and other procedural aspects on the establishment of intermediate parent undertakings in European Union (EU), as laid down in the Capital Requirements Directive (CRD).
In a recent Market Notice, the Bank of England (BoE) confirmed that green gilts will have equivalent eligibility to existing gilts in its market operations.
The Financial Conduct Authority (FCA) published the policy statement PS21/9 on implementation of the Investment Firms Prudential Regime.
The European Banking Authority (EBA) proposed regulatory technical standards that set out criteria for identifying shadow banking entities for the purpose of reporting large exposures.
The Board of the International Organization of Securities Commissions (IOSCO) proposed a set of recommendations on the environmental, social, and governance (ESG) ratings and data providers.
The European Securities and Markets Authority (ESMA) published recommendations from the Working Group on Euro Risk-Free Rates (RFR) on the switch to risk-free rates in the interdealer market.
The European Commission (EC) announced plans to defer the application of 13 regulatory technical standards under the Sustainable Finance Disclosure Regulation (2019/2088) by six months, from January 01, 2022 to July 01, 2022.
The European Insurance and Occupational Pensions Authority (EIOPA) proposed to amend the supervisory statement on supervision of run-off undertakings that are subject to Solvency II regulation.
The Bank of England (BoE) published a consultation paper on approach to setting minimum requirement for own funds and eligible liabilities (MREL), an operational guide on executing bail-in, and a statement from the Deputy Governor Dave Ramsden.
The European Banking Authority (EBA) is seeking preliminary input on standardization of the proportionality assessment methodology for credit institutions and investment firms.