Chinese regulator takes over insurance company: Report

There is no reason indicated yet for the transfer.

A Chinese financial regulator has approved the takeover of China Evergrande Group's insurance business by a new state-owned entity, Nikkei reported.

The National Administration of Financial Regulation in China has given the green light for the transfer of Evergrande Life Insurance to Haigang Life Insurance, a new company with capital from five state-owned entities.

READ MORE: Evergrande's life insurance arm taken over by new stateowned vehicle

Shenzhen City Penglian Investment, backed by the Shenzhen government, controls 51% of Haigang Life, while China Insurance Security Fund owns 25%, and three other state-owned firms hold the remaining shares.

The specific reason for the transfer has not been disclosed, but it is likely part of Evergrande's efforts to liquidate assets as the company undergoes restructuring. 

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Evergrande Life Insurance had reported insolvency, with losses of over $5.5b in 2021 and total liabilities exceeding total assets by nearly $2.6b at the end of that year.

Evergrande initially entered the insurance market through an acquisition in 2015, and the insurer's financial troubles have since become a significant concern.

The details of the transfer, including the price and specifics of the deal, are not yet clear. 

However, it is evident that Haigang Life Insurance will be headquartered in Shenzhen, rather than its previous location in Chongqing.