On September 10, the State Financial Supervision and Administration Bureau issued the "Notice on Optimizing the Solvency Supervision Standards of Insurance Companies".
The "Notice" clarifies that for insurance companies to invest in CSI 300 Index constituent stocks, the risk factor will be adjusted from 0.35 to 0.3; for investment in common stocks listed on the Science and Technology Innovation Board, the risk factor will be adjusted from 0.45 to 0.4. For investments in publicly offered infrastructure securities investment funds (REITS) that are not penetrated, the risk factor is adjusted from 0.6 to 0.5.
Since the Political Bureau meeting of the CPC Central Committee on July 24, relevant government departments have continuously introduced supporting policies focusing on “activating the capital market and boosting investor confidence.” Industry experts pointed out that the issuance of the State Administration of Financial Supervision document is an innovative practice based on the industry's own development rules to better serve the real economy and better support the development of the capital market.
"The risk factor has the same meaning as the risk weight in capital measurement." An insider in the insurance industry told reporters that for insurance companies, a reduction in risk factors means less capital will be occupied, and the insurance company will have more space to use funds at its disposal. Large, that is to say, the space for incremental insurance capital to enter the market will be further opened up.
Yu Ze, president of PICC Property & Casualty Co., Ltd., told reporters that taking the CSI 300 Index constituent stocks invested by PICC Property & Casualty Insurance Co., Ltd. as an example, after the adjustment is implemented, the minimum capital will drop by about 1.6 billion yuan, "which will help us further increase our investment in Investments in CSI 300 Index constituent stocks, REITs, and unlisted equity in national strategic emerging industries will continue to serve the development of the real economy and technological innovation."
The investment scale of insurance funds in the domestic A-share market is close to 3 trillion yuan, which is an important "ballast stone" and "stabilizer" in China's capital market. This "Notice" points out that the proportion of future surplus of insurance companies with a remaining term of more than 10 years in the core capital should be increased from 35% to 40%; at the same time, qualified non-basic assets should be included in the minimum capital measurement of interest rate risk scope.
"For a long time, facing the downward trend of risk-free interest rates, increasing the allocation of equity assets has always been an inevitable choice for the use of insurance funds." Wang Junhui, chief investment officer of China Life Insurance (Group) Company, told reporters that the optimization of the above policies has to a certain extent It can increase the core capital of insurance companies, thereby indirectly releasing the allocation space of equity assets.
At the same time, significantly increasing the proportion of long-term insurance policies included in core capital will also help encourage life insurance companies from the regulatory level to underwrite long-term insurance policies and persist in long-term operations.
In addition to guiding insurance companies to support the stable and healthy development of the capital market, this Notice also enhances the differentiation and refinement of insurance solvency supervision to further support the growth of small and medium-sized insurance companies.
The "Notice" differentiates the minimum capital requirements. Property insurance companies and reinsurance companies with total assets of more than 10 billion yuan and less than 200 billion yuan, and personal insurance companies with total assets of more than 50 billion yuan and less than 500 billion yuan are required to have a minimum capital of 95% to calculate the solvency adequacy ratio; total assets For property insurance companies and reinsurance companies with total assets of less than 10 billion yuan, and personal insurance companies with total assets of less than 50 billion yuan, the minimum capital is calculated as 90% of the solvency adequacy ratio.
Solvency is one of the cores of insurance company management, and the solvency adequacy ratio is an important regulatory indicator for measuring the capital level of insurance companies.
Guan Pei, chief actuary of Generali Life, said that this adjustment actually matches different characteristic coefficients for companies of different sizes. Compared with large companies, the capital requirements for small and medium-sized companies are appropriately lowered. The minimum capital for medium-sized companies is calculated based on 95% of the solvency adequacy ratio. The minimum capital for small companies is calculated as 90% of the solvency adequacy ratio.
"With the introduction of this policy, it is expected that the solvency adequacy ratio of small and medium-sized property insurance companies will increase by 13 to 18 percentage points." Zhang Qingsong, financial director and chief investment officer of Anhua Insurance, told reporters.
Guan Pei believes that many small and medium-sized companies have been established for a short period of time and most of them have not experienced a complete economic cycle. In recent years, the Matthew effect has become increasingly obvious. Taking into account the differences in scale and development stage of different insurance companies, the implementation of differentiated regulatory policies has given small and medium-sized companies more room for development.