A company has been incorporated to manage China's insurance protection fund (IPF) (previously controlled by the China Insurance Regulatory Commission (CIRC)) as part of its response to the global financial problems. The IPF protects policyholders when insurers go bankrupt and also companies that take over insolvent insurers.
The new company will be responsible for managing and operating the IPF; and for monitoring and assessing risk in the insurance industry. An important benefit is that the CIRC has stated the company will be able to invest the IPF in a much wider range of financial products than was previously permitted. The IPF can be invested in central bank bills as well as bonds issued by companies and Government-controlled financial institutions. Previously the IPF could only be invested in national debt.
The new company will be chaired by Mr Wei Yingning, the current Vice-Chairman of the CIRC, and the company's President will be Mr Zeng Yujin, a former CIRC official. Represented on the board will be the central bank, finance ministry, three insurers and other government agencies. The CIRC will supervise the company.
Further information on the CIRC and the IPF can be found by clicking here.