China pushing insurers to quickly settle claims in Malaysian plane case

Beijing is pushing domestic insurers to fast-track compensation to relatives of the missing passengers.

The government's pressure comes as a double whammy to Malaysia Airlines, which is already staring at a costly legal battle if the passengers' kin decide to sue for alleged shortcomings in its security procedures.

Security has come under the spotlight after officials confirmed at least two passengers used stolen passports to board the plane even though they feature in an Interpol database.

With the likelihood of heavy payouts by insurers and airlines increasing, investors were quick to dump related stocks. Kuala Lumpur-listed Malaysia Airlines plunged 10 per cent at one point in yesterday's trading, while the Hong Kong-listed China Southern Airlines, which has a code-sharing arrangement with Malaysia Airlines, fell 3.85 per cent.

Cathay Pacific slipped 0.38 per cent, China Insurance 2.28 per cent and Ping An Insurance dropped 1.68 per cent, on a day that the Hang Seng Index fell 1.75 per cent.

Major mainland insurers have contacted families of some of the 153 Chinese passengers on the missing plane after an urgent notice issued by the China Insurance Regulatory Commission on its website that stipulated all insurance companies should take urgent measures to make their staff work around the clock to check if their policyholders were among the passengers. All insurers should contact the families of the insured victims to provide assistance or compensation, the notice said.