China’s National Financial Regulatory Administration has published for public consultation draft measures that would обновate asset-liability management requirements for insurance companies, consolidating existing rules and strengthening “asset-liability linkage” supervision. The draft is positioned as a response to changes in the operating environment and to the planned full adoption of new insurance accounting standards in 2026, which will adjust asset-liability matching metrics and heighten sensitivity to interest-rate movements. The draft comprises five chapters and 51 articles, setting objectives and principles, governance expectations and required policies and procedures. It would place ultimate responsibility with the board, require senior management leadership and an asset-liability management function that coordinates across departments with internal audit oversight, and introduce long-cycle performance assessment. Insurers would be required to prepare an asset-liability management plan spanning business planning, product development and pricing, insurance business management, asset allocation policy and major investments, alongside stress testing, back-testing, periodic reporting and timely strategy adjustments. Supervision would be anchored on five regulatory indicators with explicit thresholds—effective duration gap, comprehensive investment return coverage ratio, net investment return coverage ratio, retained funds coverage ratio and liquidity coverage ratio under stress—supplemented by additional monitoring indicators with differentiated early-warning bands. The draft also updates methodologies, including adjusting stress scenarios for macroeconomic changes, recognising the hedging effect of financial derivatives in duration calculations, and extending the evaluation horizon for cost and return metrics to three to five years; it also sets out information reporting, third-party review and capability assessment requirements and specifies supervisory measures and potential administrative penalties for firms that fall below thresholds.
China Banking and Insurance Regulatory Commission 2025-12-19
China’s National Financial Regulatory Administration consults on new insurance asset-liability management rules with five threshold-based regulatory indicators
China’s National Financial Regulatory Administration has released draft measures for public consultation to update asset-liability management requirements for insurance companies. The draft aims to consolidate existing rules, enhance "asset-liability linkage" supervision, and align with new insurance accounting standards set for 2026. Key elements include governance expectations, regulatory indicators with thresholds, and methodologies for stress testing and performance assessment.