Recently, Dagong attended the Repayment Capability Regulation Seminar (‘the Seminar’) hosted by China Insurance Regulatory Commission with CIRC officials, and experts, scholars and other industry participants from Chinese Academy of Social Sciences, PWC and other institutions. The Seminar focused on China’s second-generation regulatory system for repayment capability of this industry (‘the 2nd-generation System’).
On the existing problems in the repayment capability of the insurance industry, Dagong gave five suggestions from the perspective of credit rating:
First, to encourage insurance companies to receive and publish issuer credit ratings annually besides debt credit ratings.
Second, to attach more importance to the operating characteristics of insurance companies in selecting the test scenarios for cash flow pressure.
Third, to improve the rules concerning the compilation, submission and disclosure of embedded value reports.
Fourth, to continue to diversify the capital replenishment mechanism.
Fifth, to complete the shift in other regulatory rules in the fastest manner.
The five suggestions, pointing to the problems existing in the 2nd-generation System, were highly spoken of by other attendees. The CIRC officials said they would like to further the discussion on the underlying factors behind the operation of the industry with insurance experts and scholars in the future.