China insurance regulator announces venture capital fund

BEIJING -- The China Insurance Regulatory Commission (CIRC) announced a venture capital fund scheme which will facilitate insurance capital investment for small companies and start-ups on Monday.

The insurance capital will support the financing needs of small firms, technological companies and those in newly emerging industries, through investing in company stocks, preferred stocks, and convertible securities, a CIRC said in a statement on its website.

For risk concerns, the CIRC required total investment allocated for the venture capital fund scheme should not exceed 2 percent of an insurance company's total assets registered at the end of the previous quarter. Meanwhile, an insurance company's investment in a single venture capital fund should not exceed 20 percent of the fund's total value, the statement said.

Data showed insurance companies have provided more than 50 billion yuan ($8.2 billion) to small and micro-sized companies so far through stock purchases, equity investment and asset-backed insurance lending.

The CIRC predicted up to 200 billion yuan could be unleashed to support small companies through the new venture capital fund scheme.