The CBRC will supervise the balance sheet, operating conditions and capital adequacy ratio of insurance companies to ensure their legal, steady and healthy operation.
If an insurance company goes bankrupt, in Chinese mainland, the state implements a triple safeguard system to protect the interests of investors.
These include:
1. Insurance company risk compensation fund. This fund is a government guarantee mechanism that China Banking and Insurance Regulatory Commission plays a role in the risk events of insurance companies according to the risk compensation paid by insurance companies.
When an insurance company has a major business risk event, risk compensation can save the insurance company. If the insured suffers losses, it can be paid by the risk compensation fund of the insurance company.
2. Official designated takeover agency. If an insurance company loses the ability to operate independently, in Chinese mainland, institutions approved by the government (for example, China People's Bank, China Bank and China Insurance Regulatory Commission, etc. ) can take over the insurance company.
The takeover agency will check the financial status of the insurance company and formulate measures to ensure its stable operation.
3. China Insurance Guarantee Fund. If the insurance company is determined to be irretrievable by the takeover institution, the China Insurance Guarantee Fund can participate in the disposal of the insurance company and compensate the interests of the insured.
Therefore, if an insurance company closes down in Chinese mainland, the insured can apply for and enjoy the triple security system provided by Chinese mainland to reduce the potential risks.
However, the insured should also carefully choose a sound insurance company, at the same time, truthfully assess the risks and rationally allocate assets.
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