China encourages mainland insurers to sell catastrophe bonds in Hong Kong


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Surveillance cameras are seen outside the building of the China Banking and Insurance Regulatory Commission (CBIRC) in Beijing, China on December 13, 2018. Photo taken on December 13, 2018. REUTERS / Stringer

BEIJING, Sept.27 (Reuters) – China’s banking and insurance regulator on Monday issued an advisory encouraging the sale of catastrophe bonds by mainland insurers in Hong Kong.

China Banking and Insurance Regulatory Commission (CBIRC) statement says mainland P&C and reinsurance companies may set up special purpose entities in Hong Kong to raise funds through bond sales .

The deal can help diversify insurers’ losses from natural disasters such as earthquakes, floods and typhoons, he said.

The devastating summer flooding in populated central China’s Henan Province this year has alerted Chinese authorities to seek better insurance coverage against natural disasters. Read more

The CBIRC said in July that it will help insurers increase their investment in natural disaster insurance, enrich product offerings and raise public awareness of risks to enable natural disaster insurance to play. a greater role in national emergency responses. Read more

Reporting by Cheng Leng and Ryan Woo; Editing by Tom Hogue, Kirsten Donovan

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