Beijing steps up crackdown on sales of Hong Kong insurance on mainland
The CIRC is determined to rid the industry of practices it says ‘disturb market order, mislead consumers and obstruct forex regulation’
China’s insurance regulator has closed down 35 websites and social media accounts selling Hong Kong insurance policies to mainlanders as it intensifies a crackdown on misconduct in the industry.
A growing number of mainland institutions have been breaking the law by directly selling or acting as proxy for sales of Hong Kong insurance products to mainland consumers seeking to diversify their assets in the face of a weak local currency. The yuan lost 7 per cent against the US dollar last year, its biggest drop since 1994.
The crackdown signals that the regulator is taking seriously its fight against those who attempt to bend the rules
Such transgressions “disturb domestic insurance market order, mislead consumers, obstruct foreign exchange regulation and help money laundering”, the China Insurance Regulatory Commission (CIRC) said on its website on Friday.
The insurance watchdog said it teamed up with police and the telecommunications authorities in a crackdown which began at the end of 2016 in 10 major provinces and municipalities including Shanghai and Guangdong.
In addition to those shut down, a further 27 websites and social media accounts on Tencent’s WeChat platform have been ordered to cease the practice. The regulator did not name the websites and accounts.
It is illegal to sign a policy issued by a Hong Kong insurer on the mainland. Some institutions also crossed the red line by illegally soliciting consumers to buy insurance products in Hong Kong, the regulator noted.
