Circ to push four measures to prevent insurance risks

Yang Mingsheng, vice chairman of China Insurance Regulatory Commission, 19th at the 12th session of the Beijing Branch Expo 2009 China Financial Summit, said that at present, our industry is facing the four risks of product pricing, reserve evaluation, catastrophe, balance of assets and liabilities, CIRC will promote the adjustment of business structure, strengthen the matching management of assets and liabilities　　We should improve the corporate governance structure of insurance companies and strengthen the four measures of supervision and cooperation in order to promote the stable development of insurance industry.　　When it comes to pricing risk for products, Yang Mingsheng said that the pricing of insurance products is based on past actuarial assessments and future expectations, and that any evaluation error can pose risks. "The pricing risk of the insurance industry in our country is the risk of the difference between the interest rate of life insurance products and the real investment rate in the middle of the last century 90."　　"he said. Yang Mingsheng also believes that the insurance industry faces the risk of inadequate reserve assessment. Reserves assess the conditions that affect the profits, taxes and solvency of insurance companies.　　Inadequate reserves lead to an overvalued profit in the current period, and insurance companies may be at risk of future cash flow shortfalls, thus affecting the accuracy of reserve assessments in other operations. Referring to the risk of asset-liability matching, Yang Mingsheng points out that if interest rate changes affect insurance companies ' assets and liabilities differently, there will be mismatches between assets and liabilities, which may lead to an inability to meet the solvency of insurers. At the same time, the small scale of medium and long term tools which can be used for insurance companies ' investment in China's market, lead to the risk of time mismatch.　　In addition, the issue of currency mismatches is now highlighted as insurance companies overseas finance and the expansion of domestic insurers ' overseas operations. To prevent the above four risks, Yang Mingsheng that, first of all, to vigorously promote the restructuring of the business structure, and actively develop risk protection and long-term savings-type insurance business, is conducive to highlighting the advantages of the insurance industry, enhance the stability of business development, strengthen the foundation of the industry development; Strengthening the consciousness of asset-liability matching, perfecting the structure system of asset-liability management, introducing advanced analytical methods and technical means, providing a strong guarantee for carrying out asset-liability matching; Third, we should further improve the corporate governance structure of insurance companies. Yang Mingsheng that, although several large insurance companies have been listed in China, but there is still a long way to go in perfecting the corporate governance structure.