CHINA has allowed insurers to double their stock-market investment in a long-awaited move, a newspaper reported yesterday.
The China Insurance Regulatory Commission will allow insurers to invest up to 10 percent of their assets in the stock market, the Shanghai Securities News said, quoting unnamed authorities.
Insurers can also invest in bluechip stocks which have more than doubled in the past 12 months and special-treatment shares, which was previously forbidden, the report said.
Insurers can also invest up to 10 percent of their total shares investment in a single stock in key and profitable industries, up from a previous five percent, according to the newspaper.
The commission introduced the new regulations in April, but some insurance assets management companies only received a copy of the rules on July 13, it said.
The insurance watchdog was not available for comment yesterday.
The move, which has been expected in the industry for a year, will help China Life Insurance Co, Ping An Insurance Co and rivals boost returns from their assets as premium growth slows.
Chinese insurance assets topped 1.97 trillion yuan (US$260.46 billion) at the end of 2006. The new rules means insurers can invest another 98.5 billion yuan into the stock market.
The benchmark Shanghai Composite Index surged 130 percent last year, and the index has gained 43 percent this year.
Insurers like China Life and Ping An have benefited from the booming domestic stock market. China Life's profit more than doubled to 19.96 billion yuan last year.
Insurers' investments topped 1.18 trillion yuan at the end of last year, up 33 percent than a year ago. The figure had grown to 1.51 trillion yuan at the end of May.
China said in February 2004 that it supported insurance assets being invested in capital markets, and the insurance regulator announced the five-percent stock-investment cap in February 2005.