A Chinese insurer has warned the country’s regulators of defaults in the billions and possible unrest unless it is allowed to launch new products again.
Foresea Life Insurance asked the China Insurance Regulatory Commission (CIRC) in a letter dated Apr. 28 to lift its ban, “in order to avoid inciting mass incidents by clients and localized and systemic risks, producing greater damage to the industry,” reports the Financial Times. It further warned that, with an expected redemption of $8.7 billion this year, the insurer might not be able to meet payouts without selling new products.
The CIRC slapped Foresea with the ban in December over its management of customer information and accounts, reports Reuters. It also barred the company’s chairman Yao Zhenhua from the insurance sector for 10 years in February, accusing the company of breaking rules on the use of insurance funds.
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Anbang, the fast-growing Chinese insurer known for notable acquisitions like those of the iconic Waldorf-Astoria in New York and Starwood Hotels, received a ban similar to Foresea’s this month, reports FT. The CIRC said Anbang’s sales tactics were “wreaking havoc” on the sector.
