In order to further broaden the bank ’s capital replenishment channels and expand the use of insurance funds, the China Banking and Insurance Regulatory Commission has relaxed the conditions for issuers of capital replenishment bonds invested by insurance funds.

On May 27, the China Insurance Regulatory Commission website released the newly revised “Notice on Matters Relevant to Capital Supplementary Bonds of Insurance Fund Investment Banks” (hereinafter referred to as “Notice”).

The main contents of the “Notice” include: 1. Relax the conditions for issuers of capital supplementary bonds for investment in insurance funds. Eliminate the requirement that the issuer’s total assets should be no less than 1 trillion yuan and net assets should be no less than 50 billion yuan; , The requirement of capital adequacy ratio not less than 11% ”is adjusted to“ capital adequacy ratio meets regulatory requirements ”; the issuer ’s external credit rating of AAA is eliminated.

2. Cancel the external credit rating requirement of bond can be invested. Cancel the debt rating of tier 2 capital bonds that can be invested (AAA grade) and the debt rating of non-fixed-term capital bonds (AA + grade).

3. It is clear that the credit risk management capacity of insurance institutions should meet the standards stipulated by the China Banking and Insurance Regulatory Commission, and the solvency adequacy ratio at the end of the last quarter shall not be less than 120%.

4. Insurance institutions are required to be recognized as equity or fixed income assets of insurance institutions according to the issuer ’s classification of capital supplementary bond equity instruments or debt instruments, And included in the corresponding regulatory proportion management.

The China Banking and Insurance Regulatory Commission said that the “Notice” is beneficial to enrich the variety of insurance asset allocation and broaden the space for insurance capital allocation; it is conducive to expanding the investment autonomy of insurance institutions and will increase investment value and risk The right to make judgments is more handed over to insurance institutions; it is helpful to support small and medium-sized banks to replenish capital through multiple channels and optimize the capital structure; it is conducive to expanding the capital replenishment bond investor group and improving the market-based issue pricing mechanism.

The “Notice” also pointed out that insurance institutions should effectively strengthen risk management, carefully judge the benefits and risks of investment, make independent decisions, and bear their own risks. If the bank ’s second-tier capital bonds and unfixed-term capital bonds invested by insurance funds have significant risks and trigger events, the insurance institution shall report to the China Banking Regulatory Commission in a timely manner.


Attachment: Notice of China Banking and Insurance Regulatory Commission on matters related to insurance capital investment bank capital supplementary bonds

Yinbao Jianfa [2020] No. 17

Various insurance group (holding) companies, insurance companies, insurance asset management companies :

In order to serve the real economy and expand the space for the allocation of insurance funds, in accordance with the “Administrative Measures on the Use of Insurance Funds” and other regulations, we are now informing about matters related to insurance capital investment bank capital supplementary bonds As follows:

First, insurance funds can invest in secondary capital bonds issued by banks and capital bonds with no fixed term.

Second, the bank ’s secondary capital bonds and unfixed-term capital bonds invested by insurance funds should be recognized as corresponding to the issuer ’s classification of its equity instruments or debt instruments. Equity assets or fixed income assets are included in the corresponding regulatory proportion management.

3. For insurance institutions investing in bank second-level capital bonds and unfixed-term capital bonds, their credit risk management capabilities should meet the standards stipulated by the China Banking Regulatory Commission and the end of the last quarter The solvency adequacy ratio shall not be less than 120%. During the period when insurance institutions hold capital supplementary bonds, if the solvency adequacy ratio is less than 120%, they should adjust their investment strategies in a timely manner and take effective measures to control related risks.

Fourth, the issuer of bank tier 2 capital bonds and unfixed-term capital bonds invested by insurance funds shall meet the following conditions:

(1) Good corporate governance and stable operation;

(2) Capital adequacy ratio meets regulatory requirements.

V. Insurance institutions should effectively strengthen risk management, carefully judge the benefits and risks of investment, make independent decisions, and bear their own risks.

6. If the bank ’s secondary capital bonds and unfixed-term capital bonds invested by insurance funds have significant risks and trigger events, the insurance institution shall report to the China Banking and Insurance Regulatory Commission in a timely manner.

VII. The Notice of China Banking and Insurance Regulatory Commission on Matters Relating to Capital Supplementary Bonds of Insurance Fund Investment Banks (Yinbaojianfa [2019] No. 7) issued since this notice Abolished from the date.

May 20, 2020