China’s insurance regulator chimes in with war of words on illicit funds
The CIRC says it will impose the most severe punishments on insurers that breaches its rules, suspend their businesses or revoke their licenses
China’s insurance regulator has added his voice to a government crackdown on corporate raiders and their illicit funding sources, using unusually colourful language to paint the dismal picture of capitalism run amok in the world’s second-largest economy.
The regulator “will never allow the insurance industry to be turned into a rich boys’ club,” or let it become the sanctuary or war chest of corporate raiders, buyout artists and so-called “financial crocs,” said Xiang Junbo, chairman of the China Insurance Regulatory Commission, during a Beijing press conference.
The regulator, whose role is to license insurers, oversee their products and sales practices, said it will impose the most severe punishment on companies that breach its rules, suspend their businesses or revoke their licenses.
Xiang’s performance this week was an unusual one for a career auditor and banker who’s more used to legalese and the insipid language of finance and regulations. He’s borrowing the phrase “financial crocs” coined by his fellow regulator Liu Shiyu, head of the securities regulatory watchdog, who described corporate raiders as “demons that are sucking the lifeblood” of the investing public.
Speaking the same language underscores the collaboration between the insurance and securities industries, where funds raised by life insurers in high-yielding asset management products have often found their way into outsize acquisitions, hostile takeovers and aggressive raids on companies in China and Hong Kong.
