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Tighter rules proposed for foreign investors
Latest Updated at 2008-April-2 09:55:13
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China's insurance regulator plans to ban foreign insurers from buying into more than one domestic seller of the same type of insurance.

Foreign investors which have already invested in a domestic insurer will not be allowed to buy into another one of the same business type, the China Insurance Regulatory Commission said in a draft rule posted on its Website.

The regulator is soliciting public opinion until April 30.

Overseas financial institutions must have total assets of no less than US$2 billion and posted at least three straight accounting years of profits.

Those investors are also required to have a long term rating of A-level or higher from international rating agents for at least three years.

The draft is a revision based on an August draft.

The revision would also ease requirements for investors who buy equity in insurers via the stock market. They won't have to meet the asset and profit standards demanded for off-market stake acquisition, according to the statement.

The industry regulator also stepped up qualification requirements for insurers seeking an initial public offering or to sell additional equity.

Companies planning initial share sales or refinancing must meet regulatory requirements for repayment capacity, corporate governance and internal risk control, the statement said.

This means insurers seeking IPO and additional shares sale need not only the nod from securities regulator but the insurance watchdog as well.

The move followed the sharp plunge of shares of Ping An Insurance (Group) Co whose market value evaporated 46 percent in Shanghai since it announced a behemoth refinancing plan in late January which may chalk up 120 billion yuan. Its dive also pulled down the benchmark which lost 35 percent in the same period.

The new rule is expected to take effect this year.

Editor: Yan

By: Source: China Daily Website

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