Interest Rate Swaps Approved for Insurers

(Beijing) – China's insurance regulator has expanded a selected list of insurers eligible for interest rate swaps to include all insurers, according to a recent notice by the China Insurance Regulatory Commission.

The regulator clearly stated that the interest rate swaps were used for hedging risks, rather than for speculative gains.

The notice stipulated that the nominal principal of an insurer's trading in interest rate swaps is not allowed to exceed 10 percent of the fixed-income assets at the end of the previous quarter.

China Life Insurance Co., PICC Life Insurance Co., China Ping An Insurance (Group) Co., Taikang Life Insurance Co., China Taiping Insurance Holdings Co. and American International Assurance Co. were the first batch of insurers to trade interest rate swaps.