China Revokes Evergrande Life License in Insurance Crackdown

China’s National Financial Regulatory Administration (NFRA) has revoked the business license of Evergrande Life Insurance Co., Ltd., citing serious violations including non-compliant insurance fund usage and the transfer of benefits to related parties. The action, disclosed on August 21, represents the highest-level administrative penalty available in China’s insurance industry and formally ends the insolvent insurer’s existence as an independent operating entity.

The revocation came just one day after a Shenzhen court sentenced Evergrande Group founder Xu Jiayin to life imprisonment, marking the culmination of a multi-year effort by Chinese authorities to resolve the Evergrande crisis and hold accountable those responsible.

A Financing Vehicle Exposed

Evergrande Life’s downfall traces back to its origins as a financing arm for China Evergrande Group, once the country’s largest real estate developer. The insurer was originally established as Zhongxin Dafangdong Life Insurance in May 2006 in Chongqing. In November 2015, Evergrande Group acquired a 50% stake for 3.939 billion yuan and renamed the company Evergrande Life.

According to Xinhua News, the company’s main violations include “serious non-compliance in insurance fund usage, transferring benefits to related parties, non-compliant post-investment management, and false records in submitted reports.” The NFRA imposed the most severe penalty of revoking the business license, while the Shenzhen Financial Regulatory Bureau separately fined the company 1.76 million yuan for related-party transaction violations, fund usage issues, and internal control management failures.

The insurer grew rapidly by relying on universal life insurance products, with premium income surging from 1.3 billion yuan in 2015 to 60.3 billion yuan in 2020. Total assets exceeded 240 billion yuan by the end of 2020, and the company operated 88 branches nationwide serving over 7.48 million customers.

The Evergrande Collapse and Criminal Proceedings

The revocation marks the final regulatory chapter for the insurer, which had functioned as a financing vehicle for China Evergrande Group. As Caixin Global reported, the action came a day after Evergrande Group founder Hui Ka Yan was sentenced to life in prison.

On August 20, the Shenzhen Intermediate People’s Court sentenced Xu Jiayin to life imprisonment with deprivation of political rights for life and confiscation of all personal property. The court also fined Evergrande Group 8.82 billion yuan and Evergrande Real Estate 7 billion yuan. According to BBC Chinese, the court found that Evergrande Group and Xu Jiayin obtained control of financial institutions through bribery and other means, illegally extracting credit funds and insurance funds for Evergrande Group’s use.

The court’s findings detailed how Evergrande Life had purchased 2 billion yuan of Evergrande Real Estate bonds and subscribed to trust plans worth 990 million yuan to help Evergrande Health’s hospitals purchase medical equipment. In total, 56 individuals were sentenced by the Shenzhen Intermediate Court and Shenzhen Nanshan District Court, including Liang Dong, the former Evergrande Life chairman, with prison terms ranging from 18 years to 1 year and 10 months.

Escalating Regulatory Enforcement

The license revocation follows a pattern of escalating enforcement against Evergrande Life executives. In September 2025, the NFRA penalized 20 responsible persons from Evergrande Life with warnings and fines totaling 2.825 million yuan. As National Business Daily reported, five individuals received industry bans, including Liang Dong (lifetime ban), Chen Kun (10-year ban), and Zhu Jialin, Zeng Songbai, and Liu Guohui (5-year bans each).

The penalties extended to three former chairmen of Evergrande Life, including Peng Jianjun, described as Xu Jiayin’s “iron-clad confidant.” The China Fund News noted that these actions confirmed reports from November 2024 that more than 20 Evergrande Life executives had been taken away for investigation.

Industry observers view the penalties as part of the regulator’s broader risk resolution work. As one industry insider told Southern Metropolis Daily, “This penalty can be viewed as part of the regulator’s risk resolution work. Through serious handling of responsible persons, it regulates market order and prevents similar risks from recurring.”

Risk Resolution and Policyholder Protection

Throughout the crisis, regulators prioritized protecting policyholders. In September 2023, Hai Gang Life Insurance Co., Ltd. was approved to take over all of Evergrande Life’s insurance business and corresponding assets and liabilities. The state-owned insurer was established with registered capital of 15 billion yuan, backed by Shenzhen Penglian Investment (51%, controlled by Shenzhen SASAC), China Insurance Security Fund (25%), Guangdong Yuecai Investment Holdings (8%), Chongqing Yuxin Investment (8%), and Taiping Life Insurance (8%).

This takeover ensured that all insurance contracts continued to be honored, reflecting the regulatory priority on maintaining public confidence in the insurance system while holding wrongdoers accountable.

A Pattern of Industry Cleanup

Evergrande Life’s license revocation follows a broader pattern of regulatory enforcement in China’s insurance sector. In June 2025, Tianan Property Insurance and Tianan Life had their licenses revoked for similar violations, with seven responsible persons receiving lifetime industry bans. As Gelonghui reported, those cases involved violations including transferring benefits to related parties through trusts, deposits, wealth management products, and equity fund investments.

Evergrande Life becomes the third insurance institution to receive this top-level punishment, reflecting regulators’ zero-tolerance approach to insurance fund misuse, related-party benefit transfers, and information fraud. Revoking a business license is “the highest-level administrative penalty in the insurance industry, meaning the institution completely loses its insurance operating qualifications.”

Implications for the Industry

The Evergrande Life case illustrates the risks of insurance companies being used as “cash machines” for their parent companies. The case has become a warning example for the industry, highlighting the importance of robust corporate governance, compliant fund usage, and transparent reporting.

As regulators continue to tighten oversight, institutions with weak compliance frameworks face increasing pressure to reform or exit the market. The pattern of license revocations demonstrates a systematic effort to clean up the insurance sector and eliminate institutions that have been used as financing vehicles for their parent companies.

What to Watch For

As the Evergrande saga reaches its conclusion, several questions remain. The remaining assets of Evergrande Life that have not yet been transferred to Hai Gang Life will need to be resolved. The transition of the company’s 88 branches and 7.48 million policyholders to Hai Gang Life continues. And regulators may pursue further criminal prosecutions of Evergrande Life executives beyond the administrative penalties already imposed.

The license revocation, combined with Xu Jiayin’s life sentence, sends an unmistakable signal: Chinese financial regulators will not tolerate institutions that prioritize parent-company interests over policyholder protection and regulatory compliance. The Evergrande Life case will likely serve as a benchmark for how China handles similar insurance sector failures in the future.