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China's online-insurance stocks fell on Thursday after a regulator signaled it was ramping up scrutiny of the sector, according to media reports. The move is part of a wider crackdown on the nation's technology industry.
Insurers and local agencies were ordered by the Chinese banking-and-insurance regulator to limit misleading marketing practices, curb exorbitant fees, and protect user privacy, Bloomberg reported, citing a notice. They were asked to voluntarily address these matters, and told that failure to comply would be met with "severe punishment."
Hong Kong-listed shares in ZhongAn Online Property and Casualty Insurance fell as much as 11% on Thursday, while Ping An Insurance Group stock slid by up to 3%.
The regulator's move came as China's State Council and Communist Party Central Committee jointly released a five-year blueprint detailing increased supervision of key areas such as national security, technology, and monopolies.
Jeffrey Halley, a senior market analyst at OANDA, said some Chinese equities may have retreated on the news, but investors are growing accustomed to the "new normal."
China's broad crackdown began with fintechs this year, as the nation moved to tighten its grip on services that were suddenly presented with new compliance challenges. Shares in some of the biggest Chinese firms including Alibaba's affiliate Ant Group and Tencent Holdings, edtech companies, and ride-hailing firms like Didi have been dented by increased scrutiny.
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