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The Banking Regulatory Commission issued the Notice on the Participation of Insurance Funds in Credit Risk Mitigation Tools and Credit Protection Tools Business

May 15, 2019 18:26
source: Banking Regulatory Commission website

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Summary
[Notice of China Banking Regulatory Commission on the issuance of insurance funds to participate in credit risk mitigation tools and credit protection tools business] Insurance institutions should monitor the trading situation of credit risk mitigation tools and credit protection tools in real time, regularly assess relevant risks, and participate in insurance funds. The Interim Measures for the Trading of Financial Derivatives requires that monthly, quarterly and annual reports be submitted to the Banking Regulatory Commission. The contents of the report include, but are not limited to, business development, risk hedging, audit auditing and compliance. (Singapore Insurance Regulatory Commission website)

  China Banking Regulatory Commission OfficeInsuranceNotice of funds participating in credit risk mitigation tools and credit protection tools business

EachInsuranceGroup (holding) company,Insurancethe company,InsuranceAsset Management Company:

For further improvementInsuranceCapital service entity economic efficiency, richInsuranceCapital management tools to improve market credit risk dispersion and sharing mechanisms, according toInsuranceMeasures for the Management of Funds Utilization,InsuranceProvisions on the Participation of Funds in Financial Derivatives Trading, etc.InsuranceThe relevant matters concerning the participation of funds in the credit risk mitigation tools and credit protection tools business are as follows:

1. Credit risk mitigation tools and credit protection instruments referred to in this notice refer to credit derivatives used to manage credit risk. Among them, credit risk mitigation tools include contract products and vouchers, and credit protection tools include credit protection contracts and credit protection vouchers.

Second,InsuranceThe participation of funds in credit risk mitigation tools and credit protection tools is limited to hedging risks.InsuranceGroup (holding) company,InsuranceCompany andInsuranceAsset management company (hereinafter collectively referred to as "InsuranceThe organization") shall not act as a credit risk taker.

3. Participation in credit risk mitigation tools and credit protection tools businessInsuranceThe organization should have the ability to use derivatives and credit risk management, andInsuranceFunds participate in the regulation of financial derivatives transactions.

Fourth,InsuranceThe organization shall abide by the relevant business rules of credit risk mitigation tools and credit protection tools, and the reference entities and target debts of credit risk mitigation tools and credit protection tools shall comply withInsuranceRelevant regulatory requirements for the use of funds.

Fives,InsuranceThe organization shall formulate management systems and business operation procedures for participating in credit risk mitigation tools and credit protection tools businesses to prevent credit risks, market risks and operational risks.

Six.InsuranceThe organization shall monitor the trading situation of credit risk mitigation tools and credit protection tools in real time, and regularly assess relevant risks, and follow theInsuranceThe Interim Measures for the Participation of Funds in Financial Derivatives is required to submit monthly, quarterly and annual reports to the Banking Regulatory Commission. The contents of the report include, but are not limited to, business development, risk hedging, audit auditing and compliance.

7. The Silver Insurance Regulatory Commission will strengthen theInsuranceThe organization participates in the supervision of credit risk mitigation tools and credit protection tools business, and conducts on-site and off-site inspections according to law.InsuranceWhere an organization violates the regulations and participates in relevant business, the Banking Insurance Regulatory Commission will impose administrative penalties on relevant institutions and personnel in accordance with relevant regulations.

Hereby notify.

May 7, 2019

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(Article source: Banking Regulatory Commission website)

                (Editor: DF075)

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