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.
Effective Date: August 07, 2019
Keywords: Asia Pacific, China, Insurance, Asset and Liability Management, ALM, CBIRC
Previous ArticleFSB Chair Outlines Progress on Reform of Interest Rate Benchmarks
The European Commission (EC) published the Delegated Regulation 2021/1527 with regard to the regulatory technical standards for the contractual recognition of write down and conversion powers.
The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to provide guidance to authorized deposit-taking institutions on the interpretation of APS 120, the prudential standard on securitization.
The Single Resolution Board (SRB) published a Communication on the application of regulatory technical standard provisions on prior permission for reducing eligible liabilities instruments as of January 01, 2022.
The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to clarify the regulatory capital treatment of investments in the overseas deposit-taking and insurance subsidiaries.
The European Banking Authority (EBA) published the final report on the guidelines specifying the criteria to assess the exceptional cases when institutions exceed the large exposure limits and the time and measures needed for institutions to return to compliance.
The Prudential Regulation Authority (PRA) issued the policy statement PS20/21, which contains final rules for the application of existing consolidated prudential requirements to financial holding companies and mixed financial holding companies.
The European Banking Authority (EBA) revised the guidelines on stress tests to be conducted by the national deposit guarantee schemes under the Deposit Guarantee Schemes Directive (DGSD).
The European Commission (EC) announced that Nordea Bank has signed a guarantee agreement with the European Investment Bank (EIB) Group to support the sustainable transformation of businesses in the Nordics.
The Hong Kong Monetary Authority (HKMA) issued a circular, for all authorized institutions, to confirm its support of an information note that sets out various options available in the loan market for replacing USD LIBOR with the Secured Overnight Financing Rate (SOFR).
The Office of the Comptroller of the Currency (OCC) issued a new "Problem Bank Supervision" booklet of the Comptroller's Handbook. The booklet covers information on timely identification and rehabilitation of problem banks and their advanced supervision, enforcement, and resolution when conditions warrant.