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China tightens purchase of Hong Kong insurance from mainland

Chinese regulators plan to make it more difficult for mainland consumers to buy insurance products from Hong Kong, China News has reported.23 Mar 2016

Chinese authorities have asked Hong Kong insurers to only sell policies for personal accidents and for medical and transport coverage to mainland customers. Life insurance and investment products should not be sold, China News said, citing the Beijing Youth Daily news site.

There has been a rapid rise in sales of insurance products to mainland consumers, in part because Hong Kong offers a wider range and higher investment return, but also due to some mainland residents using them as a way to send money out of the country, China News said.

A cap of 30,000 yuan ($4,600) has also been put on the use of electronic payment systems to buy insurance. In February China's State Administration of Foreign Exchange capped overseas purchases of insurance products using UnionPay bank cards at $5,000 per transaction and some insurers, including BOC Life, have already suspended online payments using UnionPay, China News said.

China's insurance market is the third largest in the world, state owned news agency Xinhua said last month.

Total insurance assets in China grew from five trillion yuan ($767 billion) in 2010 to 12 trillion yuan ($1.83 trillion) in 2015, according to figures from the China Insurance Regulatory Commission (CIRC).