China's insurance regulator issued rules to tighten supervision over insurers to ensure they're financially sound in order to bring the industry in line with international practices.
Companies will be required to submit their solvency ratio each quarter and annually, the China Insurance Regulatory Commission said in a statement on its Website. The ratio, a measure of risk, compares the company's capital to the required minimum to cover possible payments on policies. Insurers with a solvency percentage of less than 100 will be forced to either increase their capital or limit shareholder dividends, the regulator said. They may also be limited in the approval of new branches and products and face curbs in what they can pay managers and claim as expenses.