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Regulatory penalties and the growth of the insurance companies: Empirical evidence from China

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  • Zhang, Ning
  • Li, Yabei
  • Li, Hao

Abstract

Our analysis imposed on Chinese insurance firms from 2009 to 2022 reveals that penalties from the National Financial Regulatory Administration adversely affect the growth of these insurance companies. The imposition of administrative penalties markedly influences the growth of state-owned insurance firms, whereas the growth of non-state-owned firms exhibits insignificance. Moreover, while cumulative violations attributed to both institution and staff significantly impact the companies’ growth, the total fines levied against the staff appear to insignificant influence firms’ growth. Lastly, administrative penalties influence the growth of insurance companies by diminishing their premium income and increasing the odds of improving business evaluation ratings.

Suggested Citation

  • Zhang, Ning & Li, Yabei & Li, Hao, 2025. "Regulatory penalties and the growth of the insurance companies: Empirical evidence from China," Finance Research Letters, Elsevier, vol. 75(C).
    • Handle: RePEc:eee:finlet:v:75:y:2025:i:c:s1544612325000297
    DOI: 10.1016/j.frl.2025.106764
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    More about this item

    Keywords

    Regulatory penalties; Insurance companies; Company growth; Premium income; Business evaluation ratings;
    All these keywords.

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law

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