CHINA’S insurance regulator Friday announced a decision to immediately take over Anbang Insurance Group for a year in light of the company’s former chief being prosecuted for economic crimes.

The move is taken to maintain normal operations at the company and protect consumers’ rights, according to a statement of the China Insurance Regulatory Commission (CIRC).

“Illegal business practices by Anbang Insurance Group may seriously threaten the solvency of the company,” said the CIRC in the statement.

Public prosecutors recently filed a lawsuit against Wu Xiaohui, former chairman of the board and general manager of Anbang, in the Shanghai Municipal No. 1 Intermediate People’s Court, accusing him of fundraising fraud and embezzlement by taking advantage of his post, according to sources from the No. 1 Branch of the Shanghai Municipal People’s Procuratorate.

The CIRC said it had demanded Anbang “adjust” Wu’s positions as the company’s chairman and general manager.

A working group has been established, with participation of personnel from the CIRC, the People’s Bank of China, the China Banking Regulatory Commission, the China Securities Regulatory Commission and the State Administration of Foreign Exchange, to be responsible for the takeover of the company, the statement said.

The rights and liabilities of the company will not be changed after the takeover, it added.

“At present, business operations of the group are stable and the interests of consumers and stakeholders have been protected,” said the statement.

During the takeover, Anbang will continue to operate as a private insurer, while social capital will be introduced to complete the company’s shareholder restructuring, according to the statement.

The announcement was the latest measure by China to improve regulation of the insurance sector and prevent financial risks.

Last month, the CIRC made new rules to step up scrutiny of outbound investment by insurance funds and ban shareholders of insurance firms from interfering in fund operations.

(Xinhua)