The country is moving to decentralize the oversight of its $3.1 trillion industry.
China is making the first moves to decentralize the oversight of the $3.1 trillion Chinese insurance industry as it seeks to enhance efficiency levels.
The CBIRC has produced new guidelines granting local regulators more supervisory power.
The China Banking and Insurance Regulatory Commission (CBIRC), the national Chinese insurance industry regulator, issued all new guidelines granting new supervisory powers to local regulators who will now be responsible for certain segments of the sector.
This decision is expected to affect all 87 property insurers in the country, in addition to 13 reinsurers. Chinese insurance industry expert Zhu Junsheng from the Development Research Center of the State Council was cited in a Verdict report, saying that this choice will help to cut back on costs and eliminate redundancies in administration. Furthermore, it may also help to promote innovation.
The new Chinese insurance industry guidelines don’t hand over all supervisory responsibilities.
The new guidelines provide local authorities with regulatory responsibility for 64 of the property insurance companies in the country. That said, the remaining 36 companies in the country will stay under the supervision of the CBIRC. Those include primarily the largest institutions which offer services across the entire country.
The altered guidelines are also predicted to provide improved resource allocation optimization and to enhance coordination between local and national regulators.
Authorities in China have previously tested supervisory decentralization. However, it has held off on moving forward with those efforts since 2018, after the banking and insurance regulatory organization amalgamation formed the CBIRC. More recently, that combined regulatory body chose to take over two trust firms and four insurance companies for a year, beginning on July 17 after having determined that they were not properly governed.
The Chinese insurance industry regulator stated that those firms had been hiding information about their shareholder structures as well as about their ultimate owners. Now it hopes that the oversight system will become simultaneously more 
efficient and less costly. Whether or not it will work out this way will take considerably more time following its implementation.
