In this transitional period, insurance companies are required to submit solvency reports in both the existing solvency and the new C-ROSS regulations.
"C-ROSS aims to ensure the solvency of insurance industry in China while improving its overall competitiveness, and promote risk management across the industry."
"C-ROSS adopts a qualitative supervisory approach complementing the quantitative assessment of an insurance company's solvency position. The new solvency system also promotes capital efficiency by linking capital requirements more closely to risks, with the valuation of assets and liabilities reflecting actual risk profiles."
To ensure smooth implementation of the new system, CIRC encourages each insurance company to set up a task force composed of people from the finance, actuarial, risk management, investment, business and information technology and other relevant departments.
In January 2015, Mr Chen Wenhui, CIRC Vice Chairman, said that C-ROSS implementation would allow insurers to release redundant capital totalling CNY550 billion (US$87.9 billion). The life insurance industry would be able to release CNY500 billion in excess funds while the non-life insurance sector would find that CNY50 billion is redundant capital.
