China Banking and Insurance Regulatory Commission, Rules for the Regulation of the Solvency of Insurance Companies; Answers to Questions No.2: Perpetual Capital Bonds

Main contents: An insurance company that invests in the perpetual capital bonds issued by a bank shall compute the minimum capital for the risk of default by the transaction counterparty. Where the risk exposure is the book value, the fundamental risk factor of a policy bank or a large state-controlled commercial bank shall be 0.20 and that of a national joint stock limited commercial bank shall be 0.23.