China announces pilot program to allow insurers to invest in gold

ISTANBUL

China announced a pilot program to allow certain insurers in the country to invest in gold to diversify insurance funds and boost their risk management capabilities.

The Chinese National Financial Regulatory Administration (NFRA) said that the program allows insurers to optimize their medium to long-term asset allocations and asset-liabilities management capacities.

The pilot program listed 10 insurers that will be allowed to make investments in gold by making spot contracts traded on the Shanghai Gold Exchange (SGE), including deferred payments, centralized pricing, inquiry, and swap contracts, as well as gold leasing.

The gold investments to be made will require board approval and decision-making frameworks, and the insurance companies will have to build risk management and compliance systems to be eligible for SGE standards, the NFRA said.

The financial regulator noted that the pilot program aims to bring industry development.