CHINA has asked insurers to report to regulators possible losses from unexpected events in a move to better protect insurance assets.

Insurers and insurance asset management companies have to report to the insurance regulator of estimated losses of more than 50 million yuan (US$6.54 million) or more than 0.1 percent of the firm's total assets, whichever is lower, arising from an unexpected event, the China Insurance Regulatory Commission said yesterday on its Website, quoting a newly released guideline.

Losses may occur due to unexpected wild fluctuations in the financial markets, changes in policy, embezzlement of capital from related transaction and misconduct by executives of insurance firms, the guideline said.

Insurance companies should report possible losses from such events to the CIRC within two hours of knowing them.

Protect assets

The move aims to protect the insurance assets from suffering losses due to emergencies or lax management of insurers, the CIRC said.

Separately, the CIRC will buy 22.53 percent of New China Life Insurance Co for a reported 1.6 billion yuan (US$209 million), earlier reports said.

It is the first time the regulator is using money from an insurance asset protection fund to buy stakes in insurers as the fund is meant to help policy holders when an insurer goes bankrupt or is faced with huge problems.

The case may be linked to Guan Guoliang, ex-chairman of the Beijing-based insurer, who the regulator is investigating for alleged misuse of almost 13 billion yuan, Beijing-based Caijing magazine said.