Corruption not sole cause of the chaos in the insurance market

ON SUNDAY, the Central Commission for Discipline Inspection of the Communist Party of China, the ruling Party's top anti-graft watchdog, announced that Xiang Junbo, chairman of the China Insurance Regulatory Commission, is under investigation for suspected serious violations of discipline. Xiang's case shows the disciplinary watchdog will not only continue fighting corruption, but also further regulate the insurance industry, says Beijing Youth Daily:

Xiang is the highest-level official in the financial regulatory agency to be investigated since the top leadership launched the anti-graft campaign in late 2012. It remains to be known what deeds are being investigated, but they probably have something to do with the chaotic situation in the insurance sector in the past few years.

One aspect of this is that the high rate of return on certain investment-focused life policies, also known as universal life insurance products, have attracted hot money. In 2016, the total income from insurance premiums was 3.1 trillion yuan ($448.6 billion). But sales of universal insurance products in the first quarter alone reached as high as 596.9 billion yuan, with sales growing by 214 percent compared with the first quarter of 2015.