Banking and Insurance Regulatory Commission: Carry out special inspection of related party transactions in the use of insurance funds Focus on financial control or invisible financial control platforms with capital operation as the main business

Ouyang Jianhuan China Securities News · China Securities Network

China Securities Network News (reporter Ouyang Jianhuan) On January 14, the Banking and Insurance Regulatory Commission issued the "Notice on Carrying Out Special Inspections of Related Party Transactions in the Use of Insurance Funds", and decided to organize relevant banking and insurance regulatory bureaus to carry out special inspections of related party transactions in the use of insurance funds nationwide in 2022.

This special inspection is rolled out nationwide by adopting the method of linkage between the upper and lower levels, aiming to continuously release the momentum of reform, focus on consolidating the foundation of on-site inspection work of non-bank institutions, find out the outstanding problems that exist, reveal hidden risks, seriously investigate and deal with violations of laws and regulations, transmit regulatory pressure to market entities, form a high-pressure situation for violations of laws and regulations, and resolutely curb the spread of improper behavior in the use of insurance funds in related party transactions. The on-site inspection was organized and implemented by the Non-bank Institution Inspection Bureau of the China Banking and Insurance Regulatory Commission.

The "Circular" requires that we should continuously strengthen the construction of the on-site inspection team and improve the ability of bank insurance supervision cadres to use on-site inspection of insurance funds; we must attach great importance to scientific and technological empowerment, make full use of bank insurance-related financial infrastructure resources, make full use of relevant data and information, and scientific and technological means, and continuously improve the efficiency of inspection; while using conventional inspection methods, we must implement related parties and fund penetration inspections, and run through the whole process of the use of insurance funds to ensure that the investigation is thorough.

The Notice makes it clear that the focus of this special inspection is on financial holding or invisible financial control platforms with capital operation as the main business, as well as small and medium-sized insurance institutions with diversified and aggressively expanding industrial capital as shareholders. The key contents of this special inspection include four aspects: the system and mechanism of related party transactions, the disclosure of related party transaction information, the review of related party transactions, and the related party transactions in the use of funds.

The "Circular" emphasizes that all relevant banking and insurance regulatory bureaus should, in accordance with the risk characteristics of the inspection targets, make overall plans to allocate regulatory resources, select backbone forces to form on-site inspection teams; they should increase the intensity of punishment, and for related party transactions that are of a bad nature, with serious circumstances, and repeated investigations and repeated violations, they should be given heavier punishments in accordance with relevant laws and regulations, and the responsibility of relevant personnel should be seriously investigated, and if they constitute a crime, they should be transferred to the judicial organs for criminal liability in accordance with law.

In recent years, the CBRC attaches great importance to the supervision of related party transactions of banking and insurance institutions, and in the risk disposal of high-risk institutions, it has found that there are large hidden risks in the use of insurance funds in related party transactions, improper related party transactions are constantly renovated, and the concealment is increasing, and some shareholders and actual controllers of some companies take various ways to cover up the essence of related party transactions and avoid internal review, external supervision and information disclosure of related party transactions.

The CBRC stressed that this on-site inspection, as the first special inspection of related party transactions specifically aimed at the use of insurance funds since the establishment of the CBRC, is also the first large-scale special inspection action after the reform of the responsibilities of insurance institutions, which fully demonstrates the determination of the CBRC to implement the spirit of the Central Economic Work Conference, strengthen the effective supervision of capital, strengthen the construction of the financial supervision cadre team, and do a good job in preventing major financial risks.