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February 9, 2011updated 13 Apr 2017 8:50am

China Life and PICC fall foul of state auditor

The companies involved are China Life Insurance (Group) Company, the parent of Chinas largest life insurer, China Life, and Peoples Insurance Company of China (PICC), the parent of Chinas largest general insurer, PICC Property & Casualty

By LII editorial

China’s National Audit Office (NAO) has uncovered non-compliance issues in operations and accounting at two of China’s largest insurers during an inspection of their 2009 accounts, reports the country’s official news agency Xinhua.

The companies involved are China Life Insurance (Group) Company, the parent of China’s largest life insurer, China Life, and People’s Insurance Company of China (PICC), the parent of China’s largest general insurer, PICC Property & Casualty.

According to Xinhua, at China Life, NAO auditors found CNY698m ($106m) of non-compliance in insurance operations and CNY380m in accounting non-compliance.

Xinhua noted that at China Life, the operations misconduct included registering individual clients under the name of corporate clients, promising fixed earnings, and relaxing insurance restrictions.

In December 2009, for example, its subsidiary in Qiqihar in China’s Heilongjiang Province sold insurance policies worth CNY10.55m to its own employees. The next month all of the polices were withdrawn.

According to the NAO’s report, Xinhua said: “The subsidiary contrived the sales trick to fulfil its annual sales quota.”

At PICC, the state auditor found CNY5bn of non-compliance in operations and CNY440m of non-compliance in accounting.

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