(Bloomberg) — China’s anti-graft agency is probing the nation’s top insurance official Xiang Junbo as the government steps up a bid to rein in financial risks amid an economic slowdown.
Xiang, chairman of the China Insurance Regulatory Commission, is under investigation on suspicion of “severe” disciplinary violations, the Central Commission for Discipline Inspection said in a statement on its website on Sunday without providing details.
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The probe of Xiang, 60, the highest-ranking financial regulator to come under investigation, comes days after Premier Li Keqiang vowed in late March to “harshly punish” corruption in the financial sector and prevent the eruption of any systemic financial risks amid rising hazards in bond defaults, shadow banking and non-performing bank loans. The leadership gap at the insurance watchdog comes just as regulators have stepped up efforts to curb aggressive investments by some insurers following surging sales of investment-type products.
“The government’s anti-corruption drive in the financial sector has now netted a big tiger,” Zhou Min, a Hong Kong-based analyst at Sanford C. Bernstein & Co., said by phone. “The crackdown on the most aggressive insurers may get tougher” since the CIRC’s previous moves haven’t been tough enough, he said.
Agricultural Bank of China Ltd.’s Chairman Zhou Mubing may be reappointed to the CIRC, QQ.com reported on Sunday without saying where it got the information or providing details on Zhou’s new position. The CIRC’s press office didn’t immediately respond to a request for comment.
As customer demand for insurance products has grown, China’s largest insurers have been awash with liquidity, helping to spur an acquisition spree both at home and abroad. Anbang Insurance Group Co. and Ping An Insurance (Group) Co. were among active acquirers last year, snapping up assets from a U.S. hotel chain to an auto website operator.