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China encourages mainland insurers to sell catastrophe bonds in Hong Kong

China encourages mainland insurers to sell catastrophe bonds in Hong Kong
China encourages mainland insurers to sell catastrophe bonds in Hong Kong   -   Copyright  Thomson Reuters 2021   -  
By Reuters

<div> <p><span class="caps">BEIJING</span> – China’s banking and insurance regulator released a notice on Monday encouraging the sales of catastrophe bonds by mainland insurers in Hong Kong.</p> <p>Mainland property and casualty insurance companies and reinsurance companies can set up special-purpose entities in Hong Kong to raise funds from bond sales, according to a statement of the China Banking and Insurance Regulatory Commission (<span class="caps">CBIRC</span>). </p> <p>The arrangement can help diversify insurers’ losses from natural disasters such as earthquakes, floods and typhoons, it said. </p> <p>Devastating summer floods in the populous province of Henan in central China this year sent a wake-up call for Chinese authorities to seek better insurance cover against natural disasters.</p> <p>The <span class="caps">CBIRC</span> said in July that it would guide insurers to increase investment in natural disasters insurances, enrich product offerings, as well as raise public awareness of risks to let natural disaster insurance play a greater role in national emergency response.</p> <p/> </div>