On Aug. 31, 2019, jointly hosted by Green Legal Global Alliance (GLGA), Beijing DOCVIT Law Firm, and Sina Finance, the “Forum on Insurance & Insurance Asset Management Industries’ Innovation and Legal Health Development under the New Pattern of Financial Opening-up and Release Conference of the Blue Book of Legal Health of China’s Insurance Industry 2018 (Index & Special Reports)” was held in Beijing. Representatives from financial institutions, and various organizations and enterprises in the insurance and insurance asset management industries attended the forum, to discuss the road of benign development of the insurance asset management industry under the new opening-up pattern. 

Blue Book of Legal Health of China’s Insurance Industry 2018 (Index & Special Reports) officially released 

LIU Guangchao, President of Green Legal Global Alliance (GLGA) presided over the forum. At the forum, the “Blue Book of Legal Health of China’s Insurance Industry 2018” was officially released, and the legal health index of China’s insurance industry in 2018 issued— 112.44. President Liu interpreted the blue book. He said, on Dec. 16, 2018, Green Legal Global Alliance (GLGA) released Legal Health Index of China’s Insurance Industry 2015-2017. Today, the Blue Book of Legal Health of China’s Insurance Industry 2018 was issued, which was added with two more parts: Legal Health Index and Special Reports. Legal Health Index, from the four aspects of business entity, business operation, capital utilization, and supervision & regulation system, and from the perspective of law, comprehensively and objectively reflects the current health status of development of China’s insurance industry and its future development trend. Special Reports, focusing on the frontier issues, hot topics and difficult problems in insurance and insurance asset management industries, makes a comprehensive analysis and interpretation of several topics connecting the legal and insurance industries, including equity investment, insurance internationalization, insurance finance, etc., further expanding and enriching the evaluation system of the insurance industry’s legal health status. Green Legal Global Alliance (GLGA) would continue to conduct legal health index research together with Beijing DOCVIT Law Firm and Sina Finance, so as to provide new ideas and useful inspiration for the industry’s innovative and sound development in the new economic situation. 

Industry experts gather to discuss: 

The road of insurance & insurance asset management industries’ innovation and sound development under the new financial pattern

At this forum, the guests expressed their unique views on “Realistic difficulties in insurance fund equity investment in the context of the new regulations on integrated regulation of pan-asset management”, “Exploration of path of insurance fund equity investment and innovation of its regulation ideas in the new situation”, “Opportunities and challenges of insurance fund’s participation in overseas equity investment in the context of finance opening”, and “Discussion of management & control of insurance fund equity investment risk in the future”. 

YANG Fan, Vice President of New China Asset Management Co., Ltd.(NCAM) and Vice Chairman of Stock Equity Committee of Insurance Asset Management Association of China (IAMAC) expressed her unique views on “The problems facing the development of private equity investment and what to do next”. In addition, Ms Yang said, as an insurance asset management agency, NCAM looked forward to the further opening of China's finance and a more clarified legal regulation system in the legal field, which was the basic guarantee of the financial market. So she was full of expectations of the blue book and Green Legal Global Alliance (GLGA)’s industry research. 

TAN Guobin, PICC Capital Chief Investment Officer, discussed his understanding of insurance fund equity investment from two aspects: “How insurance funds invest in stock equity from the perspective of allocation” and “How insurance asset management institutions make equity investment”. Tan said that, since insurance fund’s opening up to equity investment in 2010, regulators had been guiding insurance funds to invest in stock equity, whereas insurance fund was relatively cautious in making equity investment, which involved risk factor, solvency and other factors. 

GU Yanlong, founding partner and General Manager of SourceCapita Management Co., Ltd. said, the characteristics of insurance liability determined that a larger proportion was invested in projects with good cash flow; investor's short-term private equity: most people were not willing to do; the internal decision-making process was complex; in recent years, the overall economic environment and the development of insurance industry were not optimistic; problems of the private equity industry itself; and “the insurance money is not easy to make” because of the industry's obvious “head enterprise effect” and other factors. 

XU Yuxin, Vice General Manager of CCCC Fund Management Co. Ltd., elaborated on “the relationship between insurance fund and infrastructure investment” and suggested that insurance fund and infrastructure investment had a high degree of fit. Besides, Xu said that the development of the insurance industry at present was rapid but not balanced, and the Blue Book of Legal Health of China’s Insurance Industry released today was of great guiding significance to how to strengthen, optimize and expand the insurance industry, and to promoting the standardized development of the insurance industry. 

YIN Kai, Managing Director of Chinese Academy of Sciences Venture Capital Management Co., Ltd., from the perspective Fund of Funds (FOF), hoped that the deep integration of technology and finance advocated by the state could, via financial institutions, involve FOF and form a pilot exploration that promoted innovation-driven high-quality development, promoted the transformation of scientific and technological achievements, and made science and technology better serve the real economy’s development. 

LU Xiaobing, Chief Investment Officer at Hangzhou Oriental Jiafu Asset Management Co., Ltd., aired his opinion on insurance fund’s participation in private equity investment. Lu pointed out that the advantage of FOF and government guiding fund was more obvious among PE funds. First, the characteristics of insurance fund, the industry attributes of insurance and the market capacity of equity were closely related; second, due to asymmetric information and friction cost, the cooperative synergy was poor, so insurance institutions were inclined to set up their own PE fund. 

Ms ZHENG Muzi, General Manager of Heilongjiang SDIC Suiyong Asset Management Co., Ltd. discussed “the cooperation between local AMCs and insurance funds”. She said, the cooperation between local AMCs and insurance funds rarely came in the form of fund, and the long-term fit between non-performing asset investment cycle and insurance fund was relatively high. Besides, Ms Zheng believed that the blue book conducted an objective study on the present development situation of the insurance industry and the situation from the perspective of law, and would offer beneficial guidance to the further standardized development of the insurance asset management industry. 

Ms ZHUO Le, Legal Risk Control Director of Huagai Capital Co., Ltd., as a market-oriented fund manager, pointed out that internal risk control management of funds was a pyramid structure, and management companies should see to it that insurance asset get guided by internal control. At the fund level, full transparency and openness is very important to insurance asset. 

Lawyer SIMA Yayun, Beijing DOCVIT Law Firm’s senior partner, based on many years of experience in the profession, expressed her views on equity investment plans. She believed that, given the current policy environment, equity investment plans were facing various aspects of pressure -- apart from the insurance asset management industry’s auditing standard, it also involved the infrastructure association's auditing standard. Under the compliance and approval requirements, it’s difficult to bridge the demands of the two sides of fund and asset; product R&D was a relatively slow process, and product investment model would be continuously discussed before it’s gradually finalized into an investment model acceptable to the industry.

In the end, President Liu made a summary of the meeting, saying that Green Legal Global Alliance (GLGA) would cooperate with Sina Finance and DOCVIT Law Firm to continue their research on the blue book of an industry’s legal health and, taking law as the core element, continuously infiltrate and extend into the industry, dedicated to building a green, three-dimensional legal ecosphere .