| Insurers given nod to invest overseas |
SHANGHAI, June 2 -- China will allow insurers to invest in overseas stock markets under new rules to be issued within one or two months.
The China Insurance Regulatory Commission is planning to allow insurers to invest under the qualified domestic institutional investors, or so-called QDII, scheme in one to two months, Sun Jianyong, director of the insurance fund management of the regulator said.
Insurers' investment channels will include derivative products, convertible bonds, and assets-backed securities, the CIRC said in a draft rule seeking public opinion yesterday.
Insurers will be allowed to convert their own assets into foreign currency and invest in mature overseas markets, including the United States and the United Kingdom.
"It's the matter of investment channels," Sun said, declining to offer further details.
Insurers can invest up to 15 percent of their total assets in the previous year into the overseas market, in a draft rule which was released to hear insurers' response in December.
Chinese insurance assets topped 1.97 trillion yuan (US$257.5 billion) at the end of 2006, and a 15 percent upper limit can means insurers can invest up to 296 billion yuan in overseas markets seeking better returns.
Chinese authorities are expanding insurers' investment channels. Previously they were limited to low-return products like bonds or deposits into stock and infrastructure markets.
The opening of the overseas market can help siphon part of China's mounting foreign exchange reserves, which topped US$1.2 trillion at the end of March.
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