The China Insurance Regulatory Commission ("CIRC") has released the Rules for the Compilation of the Solvency Reports of Insurance Companies – Questions and Answers No. 24: Trust Plans (the "Questions and Answers No. 24") to further regulate the investment in assembled fund trust plans by insurance companies and improve the relevant solvency recognition standard.
The Questions and Answers No. 24, guided by the principle of risk prevention, makes adjustments to the original recognition standard according to the credit rating of assembled fund trust plans, specifically including: 1. An assembled fund trust plan shall be recognized according to the principle of "recognizing plans based on different standards". For any trust plan invested in by an insurance company before the release of the Questions and Answers No. 24, the original recognition standard shall apply; 2. The recognition standard for assembled fund trust plans with fixed returns shall be adjusted: specifically, a plan with a credit rating of AAA shall be reduced from 95% to 90%, that with a credit rating from AA (inclusive) to AAA shall be reduced from 90% to 85%, and that with a credit rating from A (inclusive) to AA shall be reduced from 80% to 70%; 3. The recognition standard for an equity-based assembled fund trust plan shall be reduced from 80% to 75%.