China is easing investment rules allowing insurers to make longer-term investment in shares.
The country’s Ministry of Finance is to evaluate insurers’ return on net assets based on a combination of a three-year cycle and a one-year timeframe, instead of just the latter previously.
In the same notice on its website, the Ministry of Finance said that Chinese insurance firms should set reasonable investment targets and balance risk and return, as well as refrain from making high-risk investments.
Under current regulations, the country’s insurance firms are allowed to invest between 10% and 45% of their total assets in equities based on their solvency ratios.
The latest changes to the investment rules are “effective immediately”, the Ministry of Finance added.