China is likely to name a senior Communist Party graft-buster to oversee the insurance sector, people familiar with the matter said, a signal that the country’s ongoing crackdown on irregular business practices in the financial industry may be set to escalate.
Yang Xiaochao, secretary general of the Central Commission for Discipline Inspection (CCDI), is the leading candidate to head the China Insurance Regulatory Commission (CIRC), three sources with knowledge of the matter told Reuters.
The top CIRC job has been vacant since April, when former chairman Xiang Junbo was put under investigation for suspected “serious disciplinary violations,” a phrase that usually refers to graft.
Yang, 58, is an associate of Wang Qishan, the current head of the Communist Party’s CCDI, the country’s main anti-graft body. Wang is also a member of the Politburo Standing Committee, the country’s top leadership body.
Yang, a native of the eastern city of Nanjing, headed the Beijing financial affairs bureau from 2008 to 2013, and was the city’s top auditor when Wang was mayor of Beijing. Yang was named the city’s vice mayor in 2013.
Two of the sources described Yang as the “front runner” to head the insurance regulator.
The CCDI did not respond to a faxed request for comment.
Neither the CIRC nor the State Council Information Office, which doubles as the spokesman’s office for the cabinet and the party, replied to faxed requests for comment.
Yang’s appointment is not yet guaranteed. Senior leadership appointments in China can be subject to last-minute change.
It was not immediately clear when an announcement would be made.
None of the sources was willing to be identified given the sensitivity of the matter.
Slew of Arrests
President Xi Jinping has undertaken a sweeping campaign against graft since assuming power in 2012.
In recent months, officials have sharpened their focus on risky business practices in the banking and insurance sectors, announcing a slew of arrests, sanctions and new regulations.
“Corruption in the financial sector should be resolutely investigated and punished,” Chinese Premier Li Keqiang said in a speech dated March 21 that was published in April, hours after Xiang’s detention was announced.
Those caught in the anti-graft net include Yang Jiacai, who was removed from his position as assistant chairman of the country’s banking regulator, and Wang Yincheng, former vice chairman and president of state-controlled People’s Insurance Co (Group) of China, whose case was referred for prosecution, according to the CCDI.
Last month, Wu Xiaohui, the chairman of Anbang Insurance Group Co., which has made a series of headline-grabbing acquisitions, including the 2015 purchase of New York’s Waldorf Astoria hotel, was detained by authorities.
China’s next insurance regulator will face the thorny task of clamping down on risk in a sector that has seen its assets nearly double to 15.1 trillion yuan ($2.22 trillion) in the three years ended in 2016. If it doesn’t tread carefully it could destabilize the industry.
In recent months, CIRC has issued new regulations and sanctioned a handful of insurers for issuing short-term, high-yield products after they used the proceeds to finance long-term investments, including taking sizable stakes in listed companies.
Sales of so-called universal life insurance products dropped 59 percent year-on-year during the first five months of 2017, the CIRC reported in June.
Others who have been under consideration for the top CIRC post include Zhou Mubing, chairman of Agricultural Bank of China Ltd and a former vice chairman of the China Banking Regulatory Commission, financial industry sources said earlier this year.
($1 = 6.8028 Chinese yuan renminbi) (Writing by Matthew Miller; editing by Tony Munroe and Martin Howell)
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