China Insurance Regulatory Commission: Strengthening long-term assessment by the Ministry of Finance will help to better leverage the long-term advantages of insurance funds.

On July 11th, the Ministry of Finance issued the "Notice on Guiding Insurance Funds to Long-Term Stable Investment and Further Strengthening the Long-Term Assessment of State-Owned Commercial Insurance Companies", optimizing the assessment method of state-owned insurance companies' "state-owned capital appreciation rate" and "return on net assets" by combining assessments over 5 years, 3 years, and the current year. China Life Insurance Company stated that this adjustment is beneficial for better utilizing insurance funds as a "ballast" for long-term capital and patient capital. On one hand, optimizing the long-term assessment mechanism helps guide insurance funds to increase their equity market layout, especially in the context of increased investment income volatility after the implementation of new accounting standards. Through institutional design, it enhances the tolerance of insurance funds for short-term investment income fluctuations, enabling them to better play the role of a "stabilizer" and promote the stable development of the capital market. On the other hand, by increasing the weight and dimensions of long-term assessments, it helps deepen the concept of insurance funds' "long-term investment, value investment, and stable investment", guiding insurance funds to select high-quality stocks based on a medium to long-term perspective. This encourages insurance funds to continuously improve their level of in-depth research and stock pricing capabilities.