part of the premium income needs to be turned over as security deposit.

(Article 97 of the Insurance Law) An insurance company shall withdraw the deposit according to 2% of its total registered capital and deposit it in a bank designated by the insurance supervision and administration institution of the State Council, which shall not be used except for paying off debts during the liquidation of the company. )

The main investment applications of insurance companies are large bank deposits, bonds, stocks, funds, real estate, etc. The scope of investment is much wider than that of the old law, but the principle of sound security should be followed.

(Article 16 of the Insurance Law) An insurance company must use its funds steadily and follow the principle of safety.

the use of funds by insurance companies is limited to the following forms:

(1) bank deposits;

(2) buying and selling bonds, stocks, shares of securities investment funds and other securities;

(3) investing in real estate;

(4) other forms of capital utilization as stipulated by the State Council.

the specific measures for the administration of the use of funds by insurance companies shall be formulated by the the State Council insurance regulatory authority in accordance with the provisions of the preceding two paragraphs. )

The premium of the insurance company's income will be handed over to the company's asset management institution for investment and layout. Insurance companies have their own asset management teams.

(Article 17 of the Insurance Law) With the approval of the the State Council Insurance Regulatory Authority in conjunction with the the State Council Securities Regulatory Authority, an insurance company may establish an insurance asset management company.

insurance asset management companies engaged in securities investment activities shall abide by the provisions of the Securities Law of the People's Republic of China and other laws and administrative regulations.

The measures for the administration of insurance asset management companies shall be formulated by the the State Council Insurance Regulatory Authority in conjunction with the relevant departments of the State Council. )

Further reading: How to buy insurance, which is better, and teach you how to avoid these "pits" of insurance.