According to the official Shanghai Securities News, China's banking and insurance regulator started asking banks and insurers to establish pension financial services and invest funds in areas consistent with national strategies and industrial policies.
Banking and insurance institutions should strengthen pension fund investment management to support capital markets and technological innovation, as per to China Banking and Insurance Regulatory Commission (CBIRC).
The move follows as China initiated its first private pension scheme last month to address economic challenges associated with an aging population and channel more long-term money into the stock market.
In late April, a week after the private pension scheme was launched, China's securities regulator encouraged mutual funds to develop fund products for private pensions.
Commercial pension savings, commercial pension wealth management, and commercial pension insurance are examples of pension financial services that should have "pension" characteristics, according to the paper.
The CBIRC would encourage banks and insurers to offer long-term and lifetime pension services to customers, as well as support business collaboration among those institutions.
Meanwhile, Guomin Pension & Insurance Co, a newly established national pension insurance company, has released its first financial report for the first quarter of this year.
According to the 1Q2022 report, the company made a net profit of CNY468,400 ($70,400), but no insurance premium income was generated. This is because the CBIRC only gave Guomin permission to begin operations on Mar. 22. Investments resulted in a net profit of CNY468,400.
The company's solvency adequacy ratio was 14,862.00 percent as of March 31, 2022, according to the solvency report.
Guomin, based in Beijing, has a registered capital of CNY11.15 billion and 17 financial institutions as shareholders. Wealth management units of major banks, insurance companies, and securities firms are among the financial institutions. These shareholders had injected funds by their stake in the new company before Mar. 22.
The scope of Guomin's business includes annuities, life insurance, accident insurance, health insurance, reinsurance related to the aforementioned businesses, funds, consulting services related to pension management, insurance fund utilization, and other CBIRC-approved businesses.
On Sept. 2, 2021, the regulator approved the establishment of a new pension insurer to serve the national interest. Its role is to provide the impetus for the development of China's pension system's third pillar (commercial pensions). The company is expected to make innovative breakthroughs and broaden the range of pension products available in China.
