CBIRC Issues Measures for Banks and Insurers in Response to Emergency
CBIRC published the "Administrative Measures on Financial Services for Banking and Insurance Institutions in Response to Emergencies," which will be implemented from the date of issuance. CBIRC has, in conjunction with the relevant departments, issued targeted policies and measures in response to the epidemic to ensure continuity of basic financial services and promote bancassurance institutions to support the real economy to resume development as soon as possible. The bancassurance institutions shall establish and improve the emergency response management system and management system within six months from the date of implementation of these measures and report to the bancassurance regulatory agency. CBIRC also published key questions and answers related to the measures.
The measures implement the basic concepts of combining support for the real economy with maintaining the soundness of the financial system, providing convenient financial services with effective risk prevention, and adherence to the bottom line of prudential supervision and flexible response to emergencies. The bancassurance institutions mentioned in these measures refer to banking financial institutions and insurance companies. The banking financial institutions mentioned in these measures refer to financial institutions established within the territory of the People's Republic of China, such as commercial banks, rural credit cooperatives, and other financial institutions that absorb public deposits as well as development financial institutions and policy banks.
The measures clarify the definition of emergencies, the basic principles of response, and the organization and management system arrangements. The measures emphasize the need to maintain the bottom line of risk while providing financial services and financial support. Emphasis is placed on strengthening pre-loan review and post-loan management; preventing customers from improperly obtaining, using financing facilities, or preferential conditions; preventing multiple and excessive credit extensions; and preventing misappropriation of financing. Banking financial institutions shall, for loans that meet the provisions on loan reduction, exemption, and write-off, strictly follow procedures and conditions for loan reduction or write-off, do a good job in loan collection management and asset preservation, and effectively safeguard legal financial claims. The measures require institutions to conduct business retrospective and post-assessment in a timely manner, strictly prevent behavior that violate the legal rights of customers, and strengthen public opinion monitoring, management, and response.
The measures also stipulate that CBIRC can actively adjust regulatory indicators and temporarily exempt bancassurance institutions from taking regulatory measures or imposing administrative penalties. It is also emphasized that bancassurance institutions must not take the opportunity to distribute dividends and distribute or increase the remuneration packages of "directors, supervisors, and senior managers."
Related Links (in Chinese)
Effective Date: Issuance Date
Keywords: Asia Pacific, China, Banking, Insurance, Governance, Remuneration Practices, Dividend Distribution, Business Continuity, COVID-19, Credit Risk, CBIRC
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