Money

China may let insurers buy more infrastructure debt

(Agencies)
Updated: 2010-07-29 15:02

China might ease rules on how much insurers can invest in infrastructure bonds, the China Securities Journal reported on Thursday.

Under a proposal being considered by the China Insurance Regulatory Commission, insurers would be permitted to have 10 percent of their assets in infrastructure debt, the newspaper cited an unidentified source as saying.

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The ceiling is currently 6 percent for life assurance companies and 4 percent for property insurers. Additionally, total exposure to infrastructure, be it debt or equity, is capped at 8 percent of assets.

Insurance companies may also invest in projects approved by provincial governments, according to the proposed rule change.

Beijing has been gradually allowing insurance companies to diversify their portfolios while limiting the risks they run.

Insurers, for example, have been allowed to buy more corporate bonds and to invest in property. But they may have no more than 10 percent of their assets in equities.