"We will not allow you to challenge the bottom line of our regulations, tarnish the industry's image, or hurt the welfare of policyholders." Abide by the rules, or "otherwise, we will kick any miscreant out of the industry."
— Xiang Junbao, Chairman, China Insurance Regulatory Commission(CIRC)
Action always proves the true worth of words. In this case, the words of the Chinese insurance regulator barely survived a few hours.
Xiang talked tough at a Beijing press conference last week. The penalty against Foresea Life, which was announced immediately after his speech, proved otherwise.
It looked real on the surface. Foresea's chairman and owner Yao Zhenhua was barred from the industry for 10 years.
The regulator said Foresea's shareholders had used the insurer's own money for capital replenishment and it had falsified documents to keep its equity investment within regulatory cap.
More from the South China Morning Post:
The cat prevails over the mice in China's money mill, for now
What's in the short leash on China's insurers – risk or politics?
Why is Beijing declaring war on stock market 'crocodiles'?
State media called it the "heaviest" hit because it was always the general managers who took the whip, never the boss.
It is not.
Firstly, the suspension will hurt only if Yao is really the boss of Foresea.
Yet, anyone with a bit of China experience knows a business as juicy as life insurance will never land in the laps of a genuine private entrepreneur.
Yao was a little known vegetable hawker-turned-developer, when the regulator granted him the close-to-gold preparatory license in September 2011.