Different accounting rules in Hong Kong scrapped
China's insurance regulator on Wednesday ordered the country's insurers with dual listings in Hong Kong and mainland China to adopt a new, uniform accounting standard starting this year.
Chinese insurers, including Ping An, now report different earnings figures for investors in Hong Kong and the mainland, because of different accounting standards.
"Insurers, no matter whether they're listed overseas or domestically, must adopt the new, uniform accounting policies," the regulator said in a notice on its website.
Under the new policies, the cost of underwriting insurance policies must be reflected entirely in the current year's earnings statement and not spread out over several years.
Meanwhile, insurers must also adopt a new set of rules on reserves, CIRC said. Details are yet to be published.
The new standards are expected to lift insurers' net profit and net assets in 2009, but might hurt their earnings in the following years because of how reserves are treated, said Wang Xiaogang, an analyst at Orient Securities.