State custody of Anbang ends after two years

China ended the two-year state custody of Anbang Insurance Group Co, as Dajia Insurance Group, a new entity created to take over Anbang's life- and pension-insurance units as well as its asset management business, has developed capabilities to run a business normally, said the China Banking and Insurance Regulatory Commission on Saturday.

Daijia has been actively seeking out qualified strategic investors and is close to a decision, the commission said in a statement posted on its website.

The country's top banking and insurance regulator said it will help Dajia remain as a private company, enhance its corporate governance structure, improve its repayment capacity and management, and promote sustainable and sound development of the insurer by strengthening prudential regulation.

Authorities took control of Anbang Insurance Group in February 2018, after its former chairman Wu Xiaohui was arrested. He was later sentenced to 18 years in prison for fundraising fraud and embezzlement of corporate funds.

On Feb 22, 2019, the China Banking and Insurance Regulatory Commission decided to extend the takeover for another year.

Anbang sold more than 1.5 trillion yuan ($213.5 billion) of medium- and short-term wealth management insurance products between 2015 and the first half of 2017.

As of January this year, all these products had been redeemed, with no occurrence of a single default or overdue case. The legitimate rights and interests of consumers and relevant parties have been effectively protected, the commission said.

The regulator has basically completed the disposal of Anbang's non-core financial businesses, including Century Securities Co, AB Leasing Co, and Hexie Health Insurance.

The regulator said it has fully cooperated with the judiciary on Anbang's asset recovery and has reduced the insurer's losses caused by Wu's criminal behavior to the greatest extent.

To defuse financial risks at Anbang, the regulator approved the establishment of Dajia Insurance Group, which was registered on June 25, 2019, in Beijing with 20.36 billion yuan of capital, to take over equity in Anbang's life insurance, annuity insurance and asset management operations.

Dajia also set up a unit to take over some of the insurance policies, assets and liabilities of Anbang's property and casualty business.

Since the establishment of the new group, the restructuring of management and business transformation has achieved obvious effects.

Nowadays, life insurance policies covering a period of five years and above account for more than 75 percent of total life insurance policies at Dajia, significantly improving the insurer's debt structure, which was previously dominated by medium- and short-term products.