The reporter of "Daily Economic News" recently learned from the industry that the China Banking and Insurance Regulatory Commission issued the "Notice on Carrying out the Supervision and Evaluation of Insurance Companies' Solvency Risk Management Capability in 2022" (hereinafter referred to as the "Notice" to all CBIRC offices and insurance companies). ""), in order to implement the deployment of risk prevention and control in the financial industry and improve the risk management capabilities of insurance institutions, the China Banking and Insurance Regulatory Commission has decided to carry out the 2022 annual insurance company solvency risk management capability regulatory assessment (hereinafter referred to as "SARMRA assessment") work.
The "Notice" requires that all local offices of the China Banking and Insurance Regulatory Commission shall assess the solvency risk management capabilities of insurance companies in accordance with the "Regulations on Solvency of Insurance Companies No. 12: Requirements and Evaluation of Solvency Risk Management" (Yinbaojianfa [2021] No. 51). Conduct regulatory assessments.The assessment base date is May 31, 2022.The various systems officially announced and implemented by the insurance company and their implementation status before the assessment benchmark date can be used as the basis for assessment.A total of 70 insurance companies were involved in the assessment.
According to the evaluation procedure, each CBIRC bureau shall set up an evaluation team before June 25, with the bureau leader as the team leader, the division-level cadre as the deputy team leader, and no less than 4 other members;
In late June, the China Banking and Insurance Regulatory Commission conducted training for each evaluation group through a video and teleconference, explaining the SARMRA evaluation rules, relevant arrangements for evaluation work, and disciplinary requirements;
Each evaluation team will carry out on-site evaluation from July to October, and complete the on-site evaluation before the end of October;
The relevant bureau of the China Banking and Insurance Regulatory Commission shall submit the evaluation report and evaluation form before November 15; the China Banking and Insurance Regulatory Commission shall summarize and give feedback on the evaluation work in 2022 before December 15.
The China Banking and Insurance Regulatory Commission requires that each evaluation team should collect and consult the relevant materials of the evaluated object before officially entering the site, so as to understand and grasp the overall situation of the evaluated object, so as to improve the efficiency and quality of on-site work and ensure the scientificity and objectivity of the evaluation results.In carrying out the evaluation work, the evaluation team must strictly abide by the "Implementation Measures for the Party Committee of the China Banking and Insurance Regulatory Commission to Implement the Spirit of the Eight Provisions of the Central Committee" (Yinbaojianfa [2018] No. 23), and implement clean government requirements such as zero material transactions.
On December 30, 2021, the China Banking and Insurance Regulatory Commission issued the "Insurance Company Solvency Regulations (II)" (hereinafter referred to as the "New Regulations"), marking the "Second Phase Project of the Second Generation Solvency System for the Insurance Industry" (hereinafter referred to as the "New Regulations"). "C-ROSS Phase II") was officially completed.The "New Regulations" will be implemented from the first quarter of 2022, and insurance companies that are more affected can apply for a transition period, which will be implemented in 2025 at the latest.
Analysts at Haitong Securities pointed out in the report that "the Solvency Risk Management Requirements (SARMRA) details have been supplemented, and the solvency risk management results will be quantitatively assessed" as one of the major changes in the "C-ROSS Phase II".
The changes in the content of solvency risk management are mainly in the following aspects. First, the solvency risk management assessment of insurance companies should follow the top-down principle and the management effectiveness principle.Second, the CBIRC conducts an on-site assessment of insurance companies' solvency risk management capabilities every three years.Insurance companies that have not been assessed in the current year shall calculate the minimum capital for risk control based on the results of the latest on-site assessment.Third, insurance companies should conduct a self-assessment on solvency risk management once a year, clarify the working mechanism and procedures of the self-assessment, and ensure that the self-assessment results scientifically and reasonably reflect their risk management level.
The relevant person in charge of the China Banking and Insurance Regulatory Commission said that the "C-ROSS Phase II" is an important measure for the China Banking and Insurance Regulatory Commission to implement the spirit of the Fifth National Financial Work Conference and make good decisions and deployments to prevent and resolve major financial risks, and make up for the shortcomings of the regulatory system. It is of great significance to prevent and resolve risks in the insurance industry, maintain the safe and stable operation of the insurance market, promote the high-quality development of the insurance industry, and protect the interests of insurance consumers.
Regarding the impact of the "New Regulations" on insurance companies, Everbright Securities pointed out in a research report that in the long run, the successful completion of the "C-ROSS Phase II" has greatly optimized the risk-oriented solvency management system.It will help the insurance industry to further narrow the risk range and improve the ability to resist risks.At the same time, the "New Regulations" will help guide insurance companies to focus on their main businesses, improve their security capabilities and support the real economy.In the long run, it will help the insurance industry to improve the quality and efficiency of development.
In the short term, market participants believe that under the new solvency rules, the core solvency adequacy ratios of insurance companies will decline to varying degrees.
The "Daily Economic News" reporter noticed that in the first quarter of this year, under the new solvency rules, the core solvency adequacy ratios of insurance companies will decline to varying degrees.155 insurance companies released the first "transcripts" of the "C-ROSS Phase II", showing that 80% of the companies' solvency adequacy ratios have declined.
Haitong Securities predicted in its report at the beginning of the year that after the official implementation of the new solvency rules in 2022, there will be more small and medium-sized insurance companies that will not meet the solvency standards, but the transitional policy of one company and one policy is enough to allow substandard insurance companies to optimize their businesses, Risk management, capital increase and other methods meet regulatory solvency requirements.
In the "Notice", the China Banking and Insurance Regulatory Commission also pointed out that insurance companies should actively rectify the problems in corporate risk management found in the SARMRA assessment, continuously improve the risk management system and mechanism, and continuously improve risk management capabilities.
(Editor in charge: Ma Xin)
