China’s insurance sector is making notable strides in regulatory standards, according to a recent report from Fitch Ratings. The adoption of the International Financial Reporting Standard 17 (IFRS 17) by publicly listed Chinese insurers marks a significant shift beginning in 2023. This new accounting standard, which enhances transparency and comparability in financial reporting, will be mandatory for all insurers in China by 2026.
Despite ongoing regulatory developments, Fitch observes that the regulatory environment in China is steadily improving. The country’s domestic insurance market is characterized by its sophistication, with a diverse array of products serving both life and non-life insurance needs for corporate and individual clients alike.
The National Administration of Financial Regulation (NAFR), established in May 2023, now oversees the financial sector, excluding securities. Operating directly under the State Council, NAFR aims to unify financial practices, boost regulatory efficiency, and mitigate compliance costs and risks linked to inconsistent standards. This regulatory body succeeded the China Banking and Insurance Regulatory Commission, reflecting a significant restructuring intended to streamline financial oversight.
