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How mainlanders used insurance to bypass currency controls....

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    How mainlanders used insurance to bypass currency controls....

    Interesting article on Bloomberg.

    I am assuming that they waived health checks on these mainland clients or were they packaged in by the agents?


    Before the Chinese regulator stepped in this week with measures against the insurance industry aimed at curbing the country’s $1 trillion worth of capital outflows in 2015, hundreds of thousands of mainland Chinese had been flocking to Hong Kong to buy policies using their China-issued UnionPay credit or debit cards.

    Using the cards enabled them to get around China’s controls that officially limit citizens from converting no more than $50,000 per year and sending it abroad. By swiping the cards at insurers such as AIA Group Ltd., Prudential Plc, and Manulife Financial Corp. in Hong Kong, mainland residents bought policies denominated in Hong Kong dollars and U.S. dollars -- averaging $50,000 but reaching as much as $1 million or more -- with the equivalent amount of yuan deducted from their bank accounts back home.

    The money could then be cashed out and sent anywhere in the world as a clean source of funds from an insurance policy. Such policies, in addition to providing better health care, beneficiary payments and returns than those on the mainland, are also popular because they’re shielded from seizure in the event of bankruptcy in China or criminal proceedings, which have been intensifying under President Xi Jinping’s anti-corruption campaign. Thus, Hong Kong’s insurance policies have been turned into actual insurance for billions in Chinese cash.


    How Chinese Used Insurance to Dodge Currency Controls - Bloomberg Business
    Last edited by shri; 04-02-2016 at 03:29 PM.
    Drunken Master likes this.