CHINA’S insurance regulator said that it would relax controls on offshore stock and bond investments by domestic insurers.

    Until now, investments have been confined to Hong Kong, but the regulator will now let insurers invest in markets in 45 countries or regions, the China Insurance Regulatory Commission said in a statement Tuesday.

    Insurance funds are allowed to buy bonds with credit rating of BBB- and above, compared with BBB previously, according to the statement.

    While the move may siphon some funds away from Hong Kong, the news wasn’t all bad for the city. Under the new rules, Hong Kong’s Growth Enterprise market will be open to mainland insurance funds — in addition to the main board. Previously, stock investments in Hong Kong were limited to companies traded on the main board.

    China has taken a gradual but steady approach toward opening cross-border investment flows as it seeks to develop a mature financial system while controlling the risk of hot money flows.

    China’s insurance industry has benefited from expanded investment opportunities with average yields on investments of 6.3 percent in 2014 and overall profits doubling for the sector, said the regulator.

    Chinese insurers have stepped up their overseas investments in recent years. Outstanding insurance funds invested offshore stood at US$23.96 billion yuan as of the end of 2014, up 147 percent from the end of 2012, according to the insurance regulator.

    (SD-Agencies)