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.
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Effective Date: August 07, 2019
Keywords: Asia Pacific, China, Insurance, Asset and Liability Management, ALM, CBIRC
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