Research On Legal Regulation Of Stock Investment In Insurance Institutions

The essence of insurance is risk management and decentralization.Its significance is to bring together individual strengths,set up dangerous common groups,and provide financial support when members need compensation for accidents.In the operation of the insurance system,the insurance premiums paid by the policyholders accumulate to form an insurance fund.The size of this fund is very large and must be invested to ensure its preservation and appreciation.Stock investment in insurance institutions is an important area for the use of insurance funds.It not only enhances the efficiency of the use of insurance funds,but also affects the long-term stable development of the stock market.Since China's insurance institutions were allowed to directly invest in stocks in 2004,the links and interactions between the insurance market and the stock market have become increasingly close.The huge funds of insurance institutions have become important institutional investors in the stock market.However,for a long time,China's insurance institutions have not become the ballasts and stabilizers of the stock market as the authorities have hoped,nor have they played a positive role in long-term stable value investors.Instead,in the second half of 2015,insurance institutions aggressively invested in stocks in the stock market,frequently listed companies in large numbers,and even intervened in the control of listed companies.The alienation of stock investment behaviors of insurance institutions has triggered a shock of the capital market and widespread doubts about the appropriateness of the use of insurance funds by the public.According to thestatement,the insurance institution is an important legal entity in the stock market.It not only invests in the stock market to obtain remuneration,but also can exercise voting rights on the operating decisions of listed companies.If an insurance institution has a large capital advantage to control the management decisions of the invested company,and a large involvement in the operation of the general industry will lead to unfair market competition and potential conflicts of interest.Therefore,how to regulate the stock investment behavior of insurance institutions is necessary to stop the abuse of economic power in the insurance industry.The first chapter begins with the basic theory of stock investment in insurance institutions,analyzes the insurance principles contained in insurance institutions' investment stocks,and defines the role of insurance institutional investors in China's stock market and the objectives of legal regulation.Specifically,while the insurance community absorbs the risks of premium transfer,it also brings together a large amount of funds,making the insurance industry the manager of the policy holder's wealth,and the insurance institutions must ensure that the insurance funds are preserved and value-added.Furthermore,insurance products that simply provide risk protection have gradually developed into investment-type insurance,and increasingly have financial management and investment attributes.Therefore,the use of insurance institutions' funds is an inevitable requirement for the preservation and appreciation of insurance funds,and it is also a realistic appeal for investment-type insurance financial attributes.China's insurance institutions are not allowed to invest directly in stocks from the very beginning,but have experienced a process of prohibition,relaxation,and complete liberalization in policies and regulations.Since 2004,China's financial regulatory authorities have allowed insurance institutions to enter the market directly in terms of policies and regulations,making the interaction between the insurance market and the stock market closer.However,the significance of China's insurance industry directly entering the market to invest in stocks is not only to broaden the channels for the use of insurance funds.China's financial regulatory authorities prefer the insurance institutions to play the role of long-term value investment and act as the ballast stone and stabilizer for the stock market.However,long-term market practice shows that insurance institutional investors,as models of long-term investment and value investment,have not become an important force in stabilizing the stock market.Even in 2015,a large number of listed companies have caused panic in listed companies.Insurance institutions' stock investment links to the insurance and stock markets.It involves a wide range of risks and risks.It must ensure that insurance institutions have sufficient solvency,protect the interests of policy holders to the greatest extent,and prevent insurance institutions from abusing large capital advantages.The second chapter takes the investment of stocks in China's insurance institutions in 2015,and the events of listed companies as the analysis object,pointing out the risk points derived from the alienation of stock investment behavior of insurance institutions.Specifically,insurance institutions and large insurance funds are important institutional investors in the stock market,which play an important role in the governance of listed companies and the stability of the stock market.In the previous policy plans for reforming the capital market and developing the insurance industry,the competent authorities in China also hope that the insurance institutions will play the concept of long-term value investment and become the stabilizer and ballast stone of the stock market.However,long-term market practice shows that the insurance institutions have not achieved the goals set by the competent authorities,but instead become the speculators of chasing up and down.Especially since 2015,insurance institutions have aggressively invested in stocks,and a large number of listed companies have shaken the entire capital market.Insurance institutions subvert the image of long-term value investment and become the "barbarians" accused by public opinion.The reason why China's insurance institutions raise their risk appetite is that the aggressive investment stocks are behavioral choices under the superposition of multiple factors,but the risks they may derive cannot be underestimated.For example,the insurance institutions' aggressive investment stocks deviated from the main business of insurance risk protection,which made the insurance institutions become the financing platform for the control of large shareholders,and disrupted the normal market order with huge capital advantages.The third chapter points out that the root of the alienation of stock investment behavior in China's insurance institutions lies in the conflict of interest,and analyzes the mechanism of interest conflict in the stock investment of insurance institutions by means of capital structure theory,and proposes the specific path to resolve conflicts of interest.Specifically,the conflict of interest in stock investment of insurance institutions in China has two levels,internal and external.Internal conflicts are caused by the heterogeneity of stock investment preferences of insurance institution shareholders and policy holders.The performance of insurance institutions' shareholders is trying to avoid regulatory rules,trying to hold equity in insurance institutions and implementing high-risk stock investment behavior.Under the current law,policyholders are unable to effectively monitor insurance institutions and their rights and interests are damaged.External conflict is the organizational combination of the insurance industry and other financial industries under the financial group structure,which leads to the insurance company's stock investment behavior being manipulated and controlled by financial groups rather than independent decisions based on their own interests.Through the chaos that is derived from the stock investment of insurance institutions,in fact,the emergence of conflicts of interest has its profound institutional reasons and ways of occurrence.In view of internal conflicts,capital structure theory is used as an analytical tool,insurance institutions are highly indebted and highly leveraged,and insurance institutional shareholders have higher agency risks than general companies.Driven by self-interest,shareholders are more likely to gamble with insurance funds to invest in stocks.And in the event of a financial crisis in insurance institutions,shareholders also tend to delay capital increase and even hollow out corporate assets.To this end,there is a need for a balanced path of conflict between the interests of insurance shareholders and policy holders.First,around the "control transfer" core,build the regulatory rules for the actual controller;Second,strengthen the insurance company's major shareholder regulatory supervision,maintain the stability of the insurance company's shareholding structure;Third,strengthen the insurance company Legal liability of shareholders and actual controllers.In the case of external conflicts,in theorganizational structure of the financial holding group,the corporate governance of the insurance subsidiaries is prone to failure,and the conflict of interest with the whole group and other subsidiaries is derived,which makes the insurance company's independent decision-making mechanism for investing in stocks fail.It is a vassal of the financial holding group.To this end,it is necessary to construct an “internal firewall” for insurance subsidiaries in financial holding groups,in order to maintain the scientific and behavioral independence of insurance institutions' stock investment decisions,and to block or limit the improper influence of financial holding groups on the behavior of insurance subsidiaries.control.The fourth chapter introduces the two-time revision of the "insurance law" in Taiwan by introducing the insurance institutions that have already appeared in Taiwan's Taiwan area to participate in the control of the control of listed companies,and analyzes the basics of "financial and commercial separation" behind it.Jurisprudence,as a reference to define the reasonable boundary of stock investment of insurance institutions in mainland China.Specifically,in view of the long-term and safety characteristics of insurance funds,China's insurance institutional investors should be regarded as long-term value investors in the stock market,with financial investment as the mainstay and strategic investment as a supplement.However,analyzing the performance of China's insurance institutions in the stock market,there are two tendencies of negative speculation and active intervention in reality,which leads to the deviation from long-term value investment,which seriously deviates from the dual roles of financial investment and strategic investment.The difference in risk appetite between the insurance institution shareholders and the policy holders,as well as the mixed use of self-owned funds and foreign funds in the ordinary accounts of insurance institutions,further exacerbated the conflict of interest behavior.In 2004,there were also cases in which insurance institutions improperly invested in stocks in Taiwan and helped concerted action people intervene in the operations of listed companies.It also triggered a wide-ranging controversy over the appropriateness of insurance funds in the theoretical and practical circles.At the same time,the “insurance law” in Taiwan was revised twice to regulate the stockinvestment behavior of insurance institutions.It is stated that the third item of Article146 of the “Insurance Law” of Taiwan in China strengthens the short-term financial investment attributes of insurance institutions by depriving insurance institutions of the rights of shareholders of invested companies.However,this provision seriously violates the basic jurisprudence of shareholders' equality and is overkill.Throughout the financial regulations in Taiwan,restrictions on or deprivation of financial institutions on the rights of shareholders of invested companies are widespread.This shows that while Taiwan's Taiwan region promotes financial mixed industry in laws and regulations,it still strictly restricts financial institutions' participation in the operation of invested companies in order to implement the value orientation of "financial and commercial separation." The legislative spirit of "financial and commercial separation" should also be uniformly implemented in the regulatory rules for stock investment and equity investment of insurance institutions in mainland China.Second,implement differential supervision of financial investment and strategic investment of insurance institutions.The industry-wide restrictions on strategic investment of insurance institutions should include a list of“insurance-related businesses” and focus on strengthening the system guidance for exercising voting rights in financial investments of insurance institutions.The fifth chapter focuses on the important role of investment-type insurance in the investment of insurance institutions,and through the analysis of the basic legal relationship of investment-based insurance,the introduction of the "legal obligation" in the financial law,in order to regulate the improper investment of stocks by insurance institutions.Specifically,the legal relationship of traditional insurance-type insurance is very simple.The policy holder and the insurer are linked by an insurance contract,and the basic legal relationship belongs to the adjustment scope of the insurance contract law.The use of insurance funds accumulated by the premiums paid by the policyholders is regulated by the Insurance Law.The main objective is to ensure that the insurance institutions have sufficient solvency.There is no legal connection between policyholders and insurance institutions' investment behavior and investment objectives.However,from the perspective of the private-law relationship,the insurance institution's stock investment is an insurance institution that is entrusted by the majority of policyholders to invest the huge premiums paid in the stock market and then obtain profits.The protection of the front-end policy holders and the back-end insurance institutions' stock investment behavior regulation,the link between the two is investment-type insurance.Therefore,in addition to the public law supervision,insurance institutions' stock investment should also be regulated by private law relations.By analyzing the basic legal relationship of investment insurance,insurance institutions should have a fiduciary duty to policy holders.This establishes the fiduciary duty rules for the stock investment of insurance institutions.Including insurance institutions should carefully select the types of stocks invested beforehand,follow the principle of prudent investment,prohibit unfair treatment of policyholders,and must not use stock investment to engage in profit-transfer behavior.