Banks told to halt Anbang business dealings

China 'Detains&apos Billionaire Insurance Mogul Wu Xiaohui

China'Detains Billionaire Insurance Mogul Wu XiaohuiMore

Anbang Insurance's problems are getting worse by the day: the chairman has been detained by the police and now the government has told some Chinese banks to stop dealing with the company.

The directive came as investigators began a wide-ranging probe into Anbang's operations and detained chairman Wu Xiaohui (吳小暉), the person said, asking not to be named discussing private information.

Bloomberg reports that six large Chinese banks have stopped selling Anbang insurance policies through their branch networks, a move that will exacerbate the slide in the insurer's premium growth. Chinese regulators previous year began stepping up scrutiny of insurers who rely on sales of short-term policies to fund purchases of illiquid assets like real estate.

Anbang's life-insurance unit sold 115 billion yuan (US$16.93 billion) of policies through banks past year, double the amount in 2015 and accounting for 88 percent of total premiums, according to its annual report.

A representative for the company, however, said the company's cooperation with banks remains normal.

Last month, China's insurance regulator barred the group's Anbang Life Insurance Co from applying to issue new products for three months.

Anbang on Wednesday held a meeting of senior executives at the group and its affiliates to discuss how to stabilize staff morale amid the crisis, one of the people said.

The Bloomberg report cited an unnamed source and did not give details on what type of business dealings authorities asked banks to suspend with Anbang. Its net income declined 19 percent from a year earlier to 15.2 billion yuan.

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