The head of China’s insurance regulator is being investigated for suspected disciplinary violations, the country’s top anti-graft body said on Sunday, bringing the most senior financial regulator to date into the government’s fight against corruption.
China’s top leaders have pledged this year to address financial risks and asset bubbles.
In a brief statement, the Central Commission for Discipline Inspection said Xiang Junbo, head of the China Insurance Regulatory Commission (CIRC) and a member of the central bank’s monetary policy committee, was suspected of “serious disciplinary violations” – a phrase that usually refers to graft.
It gave no further details.
Xiang’s name and position has been removed from the CIRC’s website, www.circ.gov.cn, although news about him remains.
As head of the insurance regulator, Xiang oversaw rapid growth of the insurance industry, along with liberalization of investment rules that provided insurers greater latitude to invest more of their assets at home and overseas.
China’s insurance assets nearly doubled over the last three years, reaching 15.1 trillion yuan ($2.19 trillion) at the end of 2016.
In February, Xiang appeared at a press conference where he vowed the insurance regulator would take more punitive action to punish short-term speculators and reduce long-term risk.
Xiang said CIRC wouldn’t allow the insurance industry to become “a rich man’s club” or hideout for “financial crocodiles”.
The regulator has intensified a crackdown on risky activity by some aggressive players in the insurance sector, particularly those seen to be engaging in financial market speculation using expensive short-term funds.
Xiang, 60, took control of the insurance regulator in 2011 after serving as chairman of Agricultural Bank of China Ltd, one of the four biggest state banks.
Xiang was previously a deputy central bank governor and vice chief at the National Audit Office.
Xiang would be the most senior regulator hauled in during the anti-graft campaign since Yao Gang, a former deputy head of the China Securities Regulatory Commission, was put under investigation in late 2015 following a stock market crash.
President Xi Jinping has embarked upon a sweeping campaign against deep-rooted graft since assuming power in late 2012. His drive is tearing down once-untouchable party, military and business leaders as well as their powerful networks of relatives and allies.
Authorities will combat corruption in the financial sector that is prone to risks from bad loans, bond defaults, shadow banking and Internet finance, Premier Li Keqiang said in remarks published on Sunday.
“Corruption in the financial sector should be resolutely investigated and punished,” Li said in a recent speech posted on the central government’s website.
“Individual regulators and senior company executives who have embezzled money entrusted to them or illegally colluded with financial crocodiles must be severely punished,” Li said.
Wang Yincheng, vice chairman of state-owned People’s Insurance Group of China, was brought in for suspected corruption in February.
Earlier this year, the chief risk officer of Bank Of Communications Co Ltd was expelled from his post for serious discipline violations, and a former Communist Party boss at Bank of Jiangsu Co Ltd was investigated for suspected corruption.
By Kevin Yao and Matthew Miller
Editing by Michael Perry and Christopher Cushing, Larry King