The Chinese Insurance Regulatory Commission (CIRC) said it was stepping in to take over the business and confirmed that chairman Wu Xiaohui is facing criminal charges, according to various media sources.
Only late last year, Anbang was highlighting a no expense spared refurbishment of the Waldorf Astoria in New York, which it acquired in 2015 and in which president Xi Jinping has stayed.
However, it appears the serial acquirer had grown too unwieldy and too risky – marketing aggressively priced wealth management products with an insurance wrapper tacked on in China and making a series of foreign acquisitions.
Problems began bubbling to the surface early last year with the company forced to make statements illustrating its cash reserves in April and rebutting rumours it was taking out risky loans.
Simultaneously, the CIRC warned it was concerned about corruption in the sector.
As a result of one of its probes, Anbang’s chairman Wu was forced to hand over control of the company in June. A move the insurer said was “for personal reasons”.
Last week, the sand finally ran out and the CIRC said it was taking control of Anbang citing “illegal business practices which may seriously endanger the solvency of the company”.
The CIRC also said the once high-flying Wu would face economic crime charges thought to include fraud and embezzlement.
Local insurers will be grateful a competitor, who was grabbing market share at a rapid rate, has been incapacitated.
However, investors expecting a fire sale of Anbang’s assets, which include Vivat and Fidelity and Guaranty Life, will probably be disappointed judging by the CIRC’s measured, if not slow, approach to mopping up Anbang’s excesses.