The China Banking Regulatory Commission pointed out that insurance asset management products have long term and low leverage ratio, and there are basically no problems such as multi-layer nesting and fund pool. However, all kinds of insurance asset management products lack a unified institutional arrangement, and there are also differences with the regulatory rules and standards of asset management business of other financial institutions. The promulgation of the Measures is to unify the rules of insurance asset management products under the guidance of the Guiding Opinions on Regulating Asset Management Business of Financial Institutions, further fill the regulatory gaps, fill the regulatory shortcomings, strengthen business supervision, and promote the sustained and healthy development of insurance asset management products business.
According to the contents of the document, the Measures will come into force on May 1 2020, and insurance asset management institutions need to make rectification plans for products that do not meet the current requirements before the end of 2020, and report them to China Banking Regulatory Commission for approval before implementation. Subsequently, the China Banking Regulatory Commission will issue detailed requirements for debt investment plans, equity investment plans and portfolio insurance asset management products, forming "1+3" supporting management measures.
The Measures consists of eight chapters and sixty-six articles, including general provisions, product parties, product issuance, survival and termination, product investment and management, information disclosure and reporting, risk management, supervision and management and supplementary provisions. By adhering to the private placement of insurance asset management products, adhering to the bottom line thinking of strictly controlling risks, adhering to the long-term characteristics of insurance asset management products, and adhering to the principle of combining principle orientation with detailed rules, standardized management is carried out.
As early as 20 19 and 1 1, China Banking Regulatory Commission publicly solicited opinions on the Measures (draft for comments). Compared with the exposure draft, the "Measures" have added exceptions to the requirements of Taoxing, with two main changes:
In terms of investor qualification, it is clear that basic pension, social security fund and enterprise annuity are product investors. According to the CBRC, by the end of 20 19, the balance of insurance asset management products was 2.76 trillion yuan, including10.27 trillion yuan for debt investment plan, 0. 12 trillion yuan for equity investment plan and10.37 trillion yuan for portfolio insurance asset management products. Debt investment plan and equity investment plan mainly invest in infrastructure projects such as transportation, energy and water conservancy, and become an important tool for long-term funds such as insurance funds to connect with the real economy. Defining basic pension, social security fund and enterprise annuity as product investors better reflects the orientation of insurance asset management products serving long-term funds.
In terms of agency sales agencies, in addition to the self-operated sales of insurance asset management companies, the "banking insurance institutions" that can be entrusted are expanded to "qualified financial institutions and other institutions recognized by the China Banking Insurance Regulatory Commission", which appropriately broadens the scope of agency sales agencies. The China Banking and Insurance Regulatory Commission said that this move reserved space for the follow-up business development. Correspondingly, the Measures also deleted "investors should open accounts in the unified account system established by the registered trading platform in their own names".
At present, insurance asset management products are mainly sold by themselves. If banks, funds, trusts and even insurance intermediaries are extended to participate in consignment sales, the establishment of sales channels and the management of sales behavior will become problems that need to be faced directly. The Measures require that insurance asset management institutions and sales agents should be honest, trustworthy, diligent and conscientious, guard against conflicts of interest, perform obligations such as explanation and anti-money laundering, and undertake relevant responsibilities such as investor suitability review, product promotion and qualified investor confirmation.
In 20 18, the new regulation of large asset management "Guiding Opinions on Regulating Asset Management Business of Financial Institutions" was officially released, which provided unified guidance for the formulation of asset management measures in various sub-sectors. The typical one is to break the rigid payment and strictly control the risk of non-standard investment. In the Measures, the management of insurance asset management products strictly abides by the new requirements of large asset management, does not promise to protect capital gains, and strictly controls the 35% upper limit of non-standard investment.
Article 7 of the Measures stipulates that when an insurance asset management institution conducts insurance asset management product business, it shall strengthen the management of investors' appropriateness, fully disclose information and risks to investors, and shall not promise to protect capital and income. The so-called appropriateness refers to the customer's financial situation, risk tolerance, investment objectives, etc. It should be matched with financial products or services. This not only requires insurance asset management institutions to break the rigid redemption, but also needs to make a good risk demonstration for investors beforehand. Once investors make a decision, they must be responsible for their own profits and losses, which puts higher demands on both sides.
Similarly, the new regulations on large asset management also set an upper limit of "no more than 35% of the net assets of all asset management plans managed by securities and futures institutions" for the proportion of non-standard investments. Article 31 of the Measures stipulates that the balance of all portfolio products managed by the same insurance asset management institution invested in non-standardized creditor's rights assets shall not exceed 35% of the net assets of all portfolio products managed by it at any time.
In addition, the Measures also strictly stipulate that other asset management products invested by insurance asset management products shall not invest in asset management products other than public securities investment funds to prevent nesting and penetration of business; Insurance asset management institutions are also prohibited from providing channel services for asset management products of other financial institutions to avoid regulatory requirements such as investment scope and leverage constraints.
Attachment: Full text of the Interim Measures for the Administration of Insurance Asset Management Products