UPDATE 2-Regulator in China seizes control of Anbang as chairman prosecuted

* CIRC says to take control of Anbang for year

* Take over will commence Feb. 23

* Anbang chairman Wu Xiaohui prosecuted (Adds context, quote)

BEIJING/SHANGHAI, Feb 23 (Reuters) - The Chinese government on Friday seized control of Anbang Insurance Group Co Ltd , one of China's biggest insurance conglomerates, in a dramatic move that underscores Beijing's intent to crackdown on financial risk.

Anbang's chairman and key shareholder, Wu Xiaohui, had also been prosecuted for economic crimes, the China Insurance Regulatory Commission (CIRC) said in a statement on Friday. Wu was arrested in June as troubles mounted for one of China's most aggressive buyers of overseas assets.

The government takeover of Anbang, which claims 1.97 trillion yuan ($310.85 billion) in assets and ranks 139 on the Global Fortune 500 list, represents a defining blow to the acquisitive conglomerate best known for acquiring New York's landmark Waldorf Astoria hotel.

The move also underscores the lengths to which the ruling Communist Party is apparently willing to go in its growing campaign to lower financial risks, and sends a strong signal to risk-taking private enterprises.

After a spate of high-profile deals worth over $30 billion, Anbang began to run into roadblocks even before Wu's detention, failing to close on a handful of investments and facing criticism over its opaque shareholding structure.

"Clearly a message is being fed back into the market and to private companies that being very innovative may not be looked on favorably in the long run," said Keith Pogson, senior partner for Asia-Pacific financial services at EY.

"This says to the market 'tread carefully' - if they hadn't already got that message."

In a four-paragraph notice on its official website, the CIRC said it would take over Anbang from Friday for one year.

It would maintain the group as a private company, even as it undertakes an equity restructuring.

The CIRC added that Anbang's debts and obligations will not be impacted by the takeover.

China's insurance industry has come under the microscope over the past year or so for risky behavior, ranging from term-mismatches on insurance products and highly leveraged overseas acquisitions, as well as corrupt practices.

An Anbang spokesman was not immediately available for comment.

Calls to Wu Xiaohui's personal phone numbers were either disconnected or unanswered.

Anbang distributes insurance through multiple channels. According to its annual report, 88 percent of its insurance sales last year were through banks.

The insurer spent more than $30 billion in the two years through mid-2017 acquiring insurers, luxury hotels and other property assets.

But it has faced increasing pushback in its offshore deal-making amid a broader decline in Chinese outbound acquisitions. Beijing has strengthened curbs over capital outflows after China's leadership vowed to curb risk in its financial system. ($1 = 6.3375 Chinese yuan renminbi) (Reporting by Matthew Miller and Judy Hua in BEIJING, Engen Tham and John Ruwitch in SHANGHAI, and Jennifer Hughes in HONG KONG; Editing by Philip McClellan)