Chinese lawmakers consider insurance company investment law

Source: Xinhua | 02-26-2009 11:11

BEIJING, Feb. 25 (Xinhua) -- Insurance company shareholders could find their rights restricted if they approve risky capital operations, according to a draft amendment to the Insurance Law, submitted to Chinese lawmakers for discussion Wednesday.

The draft amendment says the State Council's insurance regulatory body will have the right to order the insurance company's shareholders to stop affiliate company transactions that seriously harm the company's interests and undermine its solvency.

The draft gives no definition of these transactions, but stipulates that the China Insurance Regulatory Commission (CIRC) will decide on which transactions come into this category.

Before the actions are corrected, the regulatory body will constrain shareholders in the exercising of their rights. If they refuse to correct the actions, the regulatory body will have the right to order them to transfer their shares, but the draft gave no details as to how or to whom the shares would be transferred.