Research On Legal Supervision Of Insurance Funds' Investment In The Stock Market

The application of insurance funds is one of the two major fields of insurance management.Since 1985 China insurance investment gate opened,the way of insurance investment is broadening.Now,the insurance can invest in the: bank deposit,bond,stock,fund,real estate,equity,etc.Among them,stock market is one of the earlier open areas.In October 2004,The China Insurance Regulatory Commission(CIRC)released <Interim Measures for the Management of the Stock Investment of the Insurance Institution Investors>.It marks the insurance funds can invest into the stock market directly.By 2018,insurance funds' investment in stocks has developed over the 15 years.Overall,the degree has been increasing year by year.Especially in recent years,China's insurance industry has witnessed a rapid growth in the scale of capital,and the stock market has also matured.The CIRC also strongly supports insurance funds to invest the stock market.However,the investment behavior of insurance funds has caused a series of problems while saving the market : ”Rat Trading” in the insurance often occurs,Evergrande Life Insurance Company sold all the DuangDong MeiYan JiIXiang Hydropower Co.,Ltd's stocks and Foresea Life Insurance invest China Vanke Co.,Ltd radically.These investment behaviors exposed the deficiencies and shortcomings in China's current legal supervision system.The entry of insurance funds into the stock market has been considered amutually beneficial act in the industry.One hand,insurance companies obtain high returns by investing in the stock market,support their traditional underwriting business,reduce rates,and increase insurance company solvency.On the other hand,the large scale of insurance funds,long investment period and long-term stable earnings can provide long-term and stable financial support for listed companies,and the stock market can develop steadily.Therefore,the government needs to supervise the investment behavior of insurance funds,and we also need to systematically study the relevant legal supervision system.This article is divided into four chapters.The author tries to analyze the existing legal supervision system of insurance fund stock investment from various angles.In January 2018,the CIRC releases <Insurance Funds Management Approach>.The author will use this legal document as a basis to combine with the current hot issues raised by insurance funds investing in the stock market,and review the basic theory of investment in insurance funds,three types of illegal violations,and the content of the legal supervision system.The author will analyze the breakthroughs and shortcomings of the <Insurance Funds Management Approach>,and further proposes regulatory recommendations,which will involve research in many disciplines such as law,finance,and management.The first chapter mainly elaborates the theoretical basis of the insurance funds stock investment.The first part includes the legal definition of insurance funds,the behavioral subjects of insurance fund stock investment,the range of investment in insurance fund stocks,and the investment model.The second part analyzes the necessity of investment behavior of insurance fund stocks and corroborates related data.The second chapter is to analyze the current illegal investment behavior and the causes behind it.First,the insurance department's "Rat Trading" acts frequently.The main reasons behind this are the opaque disclosure of insurance fund information and the unfavorable internal control of insurance asset management companies.Secondly,The Evergrande Life hype stocks.It is mainly due to the existence ofregulatory loopholes and biased stocks investment concepts of insurers.Thirdly,the insurance funds represented by “Foresea Life Insurance's licensing of Vanke”.The main reason behind this is the rapid development of Asset-driven-Liabilities models for some insurers and some insurance companies controlled by one shareholder.The third chapter mainly analyzes the legal supervision of the current insurance fund stock investment.The first part introduces the necessity of China's legal supervision and the regulatory framework.The second part analyzes the current legal supervision system for China's insurance funds and stocks investment,including asset liability management system,internal risk control system,information disclosure system.and responsibility system.The fourth chapter is a breakthrough analysis of the current legal supervision system for China's insurance funds stock investment,and further proposals for improvement.Firstly,the <Insurance Funds Management Approach>'s positive significance is reflected in:regulating stock investment and implementing differential supervision;regulating company operations and enhancing senior management responsibilities;clarifying supervision responsibilities and increasing supervision authority.Secondly,further proposals for improvement are proposed,including the legislative level,sorting out existing rules and regulations,and raising the level of legislation;from the regulatory theme,the China Banking Regulatory Commission will implement the penetrative supervision under the merger;from insurance products,it will guide the return of insurance.