Chinese insurers will be able to double their investments in private equity along with trading financial derivatives at home and abroad, according to Reuters.
The news service said that it had seen the rules drafted by the Chinese Insurance Regulatory Commission which aim to broaden insurers' investment scope.
Under the proposals, insurers would be allowed to invest up to 10 per cent of total assets in private equity, up from the current 5 per cent, potentially unleashing about $50 billion worth of fresh capital into unlisted firms. Insurers will also be allowed to trade index futures and conduct margin trading and short selling in China. In addition, the insurance watchdog has for the first time detailed the types of overseas financial instruments, including derivatives, that insurers are allowed to trade.
The new rules are the latest in a series of regulatory changes designed to expand and diversify the types of investments insurers are able to make.
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