17 February 2020

CIRC cracks down on risky insurance fund use, paper says

Insurance funds deposited with banks cannot be pledged to obtain financing, guarantees or entrusted loans, 21st Century Business Herald reported Thursday, citing new rules by the China Insurance Regulatory Commission. The regulator wants insurance companies to set up escrow accounts only with qualified financial institutions. Banks that engage in irregular use of insurance funds will be blacklisted, the report said. Some small insurers have been found to have illegally provided financing to stakeholders using insurance funds or conspired with banks to misappropriate such funds, the report said.

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