China Investigates Regulator of Fast-Moving Insurance Industry

SHANGHAI — China’s anti-corruption investigators are targeting the country’s top insurance regulator, throwing doubt over an industry that has been behind a wave of blockbuster global deals but has raised concerns about financial risk in the world’s second-largest economy.

The Chinese Communist Party’s anti-corruption investigation agency said Sunday afternoon that the regulator, Xiang Junbo, had been placed under investigation for “severe violations of discipline.” In China, that language is commonly used in reference to a corruption inquiry.

Mr. Xiang oversaw an industry that has gone from a cash-rich but sleepy backwater to a major player on the global deal-making scene in recent years. Chinese insurers have bought up a large number of properties, including big developments, European financial institutions and the Waldorf Astoria hotel in New York. Since last year, Chinese regulators have moved to curtail what have been widely seen as some of the insurance industry’s riskier practices.

It is not clear whether the investigation into Mr. Xiang is related to any of those matters. The anticorruption agency, the Central Commission for Discipline Inspection, provided no details. Mr. Xiang, 60, could not be reached for comment on Sunday, and no one answered the phone at the press office of the China Insurance Regulatory Commission, which he oversees. As of Sunday afternoon, the insurance commission’s website still listed him as its chairman.

Mr. Xiang is just the latest top Communist Party official to fall afoul of President Xi Jinping’s yearslong anti-corruption campaign. He is a member of the party’s Central Committee, a group of about 200 officials who make major decisions about how the party is run.

He is also the top regulator of a vast industry that has undergone major changes in recent years.

China has pushed to energize its long-sleepy insurance industry as part of an effort to modernize its financial system and nurture a rising culture of middle-class spenders who might want financial security. But under Mr. Xiang, the industry — which boasts 15.1 trillion renminbi, or $2.2 trillion, in assets — has also become more daring in what it invests in, defying the image of insurers as conservative stewards of wealth.

Chinese insurers have also become aggressive over the past several years in selling investment products that were regulated as life insurance but promised high rates of return with maturities of as little as a year. These products allowed insurers, particularly smaller insurers, to raise large sums of money quickly, which they then used to speculate in bonds, real estate and other investments.

The best-known of China’s smaller but fast-growing insurers in the past year has been Anbang, which bought the Waldorf Astoria in 2015. Anbang came close to investing in a Manhattan real estate tower with President Trump’s son-in-law and adviser, Jared Kushner. Work on that deal was abruptly halted last month as it began to trigger considerable public attention.

By the standards of top Chinese financial regulators — indeed, by the standards of financial regulators in any country — Mr. Xiang led an uncommonly varied and creative life.

According to state-controlled media, he joined the army and fought Vietnamese forces in a border war in 1979. He then became a successful television writer and producer, writing the screenplays for at least two TV series on the perils of corruption and a third on kung fu combatants.

Along the way, he also found time to climb the ranks of the country’s financial elite. He became chairman of China’s third-largest bank, the Agricultural Bank of China, in 2009 and of the insurance commission two years later.

Mr. Xiang’s continued leadership of the insurance commission was a subject of considerable discussion on the sidelines of the annual session of the National People’s Congress in Beijing early last month, but he was not seen as a possible target of an anti-corruption investigation. Questions instead had revolved around whether insurance regulation would be consolidated with other agencies as part of an overhaul in how China oversees its financial system.

Asked during a news conference right before the congress whether financial regulation might be consolidated under the China Banking Regulatory Commission, Guo Shuqing, China’s newly named top banking regulator and an official with a reputation as a reformer, said only that financial regulatory agencies needed to coordinate their activities.

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