Misconducts of China's two major insurers exposed, 3 bln yuan involved

China's National Audit Office (NAO) found non-compliance issues in operations and accounting totaling 3.02 billion yuan (458.33 million U.S. dollars) at two major insurers, according to audit reports for 2009 released Monday.
The NAO said it inspected the 2009 books of China Life Insurance (Group) Co. - the parent of China's largest life insurer, China Life Insurance Co. - and People's Insurance Company of China (PICC) - the parent of China's largest property insurer, PICC Property & Casualty Co.
At China Life, the auditors found 698 million yuan of non-compliance in insurance operations and 380 million yuan in accounting.
At PICC, auditors discovered 1.5 billion yuan of non-compliance in operations and 440 million yuan in accounting.
At China Life, the operations misconduct included registering individual clients under the name of corporate clients, promising fixed earnings, and relaxing insurance restrictions.
In Dec. 2009, for example, its subsidiary in Qiqihar in northeast China's Heilongjiang Province sold insurance policies worth 10.55 million yuan to its own employees. The next month, in Jan. 2010, all of the polices were withdrawn.
The subsidiary contrived the sales trick to fulfill its annual sales quota, according to the report.
The NAO said it has reported the operational non-compliance of both companies to the China Insurance Regulatory Commission (CIRC).
It has also referred 12 serious cases to judiciary and anti-corruption authorities for further investigation.
Still, the auditors said both companies had made progress in managing risk and expanding their businesses.
Source:Xinhua