Changes To China’s Solvency Framework To Be Credit Positive For Insurance Market

The recent revision to China’s solvency regime is expected to be credit positive for the country’s insurance industry and allow for greater transparency in risks and capital quality. On 30 December 2021, the China Banking and Insurance Regulatory Commission (CBIRC) announced details of the China Risk Oriented Solvency System Phase II (C-ROSS Phase II), which marked the completion of a four-year project aimed at improving the efficiency of the existing regulatory framework amid the changing insurance environment. We expect that the revised quantitative and qualitative requirements under C-ROSS Phase II will have significant impacts on the various insurance market segments.

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