Money Matters | Is Foresea Life the poster boy or scapegoat of Chinese insurance?
Foresea Life’s birth, rapid growth and current reprimand all took place on the insurance regulator’s watch, every step of the way.
“We will not allow you to challenge the bottom line of our regulations, tarnish the industry’s image, or hurt the welfare of policyholders.” Abide by the rules, or “otherwise, we will kick any miscreant out of the industry.”
-- Xiang Junbao, Chairman, China Insurance Regulatory Commission(CIRC)
Action always proves the true worth of words. In this case, the words of the Chinese insurance regulator barely survived a few hours.
Xiang talked tough at a Beijing press conference last week. The penalty against Foresea Life, which was announced immediately after his speech, proved otherwise.
It looked real on the surface. Foresea’s chairman and owner Yao Zhenhua was barred from the industry for 10 years.
The regulator said Foresea’s shareholders had used the insurer’s own money for capital replenishment and it had falsified documents to keep its equity investment within regulatory cap.