China will raise the range and threshold of insurance companies' capital investment in A and H shares and unsecured bonds, the Shanghai Securities News reported Wednesday, citing news from an insurance watchdog meeting with top executives from insurers and insurance assets management companies.
Chinese insurance companies are allowed to invest up to 20 percent of their insurance capital on domestic stocks and funds. They used to spread their investment across stocks, stock-related funds, bond funds and monetary funds.
After the insurance regulator adjusted the insurance capital investment policy, they many concentrate their investment on stocks and stock-related funds.
Chinese insurers' investments on the Hong Kong stock market were restricted to red chip and H shares only. The adjustment removed the restriction, and all stocks on the Hong Kong Main Board are available.
The threshold of unsecured bond investment was raised to 20 percent from 15 percent and the bond credit degree requirement lowered to A from AA.
The regulator's adjustment of insurance capital's investment channels will bring more flexibility, and more restrictions are expected to be removed, such as the investment ban on Special Treatment stocks (ST stocks), which have higher risks, the report said, citing an industry insider.
