The Chinese government has taken full ownership of beleaguered Anbang Insurance Group following revelation of widespread irregularities, in a bid to safeguarding consumer interests and crack down on financial risk.

In February this year, the China Insurance Regulatory Commission (CIRC) seized control of Anbang Insurance for a year. CIRC criticised Anbang for violating laws and regulations that may seriously jeopardise the solvency of the company.

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Now, the Chinese authorities have transferred nearly 98.23% ownership of Anbang to a government-controlled fund, China Insurance Security Fund, the Wall Street Journal (WSJ) has reported.

The fund, which offers last-resort support for the country’s insurance companies, had already infused RMB60.804bn ($9.65bn) into the beleaguered company.

Until a private shareholder is found, the insurer will operate as a state-owned enterprise.

Meanwhile, the committee of financial regulators that has managed Anbang since the government takeover in February will continue to oversee Anbang, WSJ reported quoting an unidentified source.

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The sourced added that the period of state administration may be extended by another year from current one-year period, if the situation warrants so.

Earlier in May, Wu Xiaohui, the former chairman of Anbang Insurance Group, was found guilty of fraud and embezzlement including false disclosures to regulators and diverting insurance premiums for his personal use and sentenced to 18 years in prison. His assets worth RMB10.5bn ($1.65bn) were also seized.

Wu challenged the charges against him, but the court has not relented so far.