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Beijing Warns Three Major Insurance Companies Over Foreign Investments

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China’s government took further steps to clamp down on the nation’s insurance sector by issuing warning on Saturday to three major insurers related to their overseas investments, just one day after the government seized temporary control of Anbang Insurance Group.

China Insurance Regulatory Commission (CIRC) issued warning notices to Ping An Insurance (Group) Co. of China, New China Life Insurance and China Re Asset Management Co., saying they had violated official rules regarding overseas investments. The notices did not, however, provide details in the nature of the wrongdoings.

The insurance regulator said it would require the three insurers, among the biggest in China, to take steps to deal with the overseas investments and report on their progress within a month.

The notices are seen as part of Beijing’s ongoing campaign to reduce risk in the insurance industry and deleverage the corporate sector in general. On Friday, the Chinese government took temporary control of debt-laden Anbang Insurance Group Co., and said it would initiate legal action against its CEO Wu Xiaohui, ex-husband to the granddaughter of former Chinese paramount leader Deng Xiaoping.

Anbang has RMB1.97 trillion (US$310.85 billion) in assets and ranks 139 on the Global Fortune 500 list. It rose to the center stage in 2015 when it announced a US$1.95 billion purchase of the iconic Waldorf Astoria Hotel in New York. It was also one of the leading suitors in a deal to acquire Strategic Hotels & Resorts Inc for a price tag of US$6.5 billion, but backed out at the last minute. Anbang’s completed series of high-profile deals worth over US$30 billion in total in a three year span.

As Chinese regulators began taking actions to further tame its aggressive overseas corporate buyers last year, Anbang again made headlines as being in advanced talks to invest in Kushner Company’s 666 Fifth Avenue project, but the son-in-law of U.S. President Trump recently said his company had stopped negotiations with Anbang. Earlier this month, Anbang abandoned its plans to buy U.S. annuity and life insurer Fidelity & Guaranty Life for US$1.6 billion, a deal struck in 2015, after it failed to secure all the necessary regulatory approvals.


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