Unfavorable returns on investments pushed China's insurance industry to 54 percent earnings slide for the first six months of the year, according to the China Insurance Regulatory Commission (CIRC).

The insurance industry posted an H1 earnings drop to Rmb105.6 billion (about US$15.9 billion) due to falling investment returns, official data showed.

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From January to June 2016, the returns of investments of insurance companies in China declined to Rmb294.5 billion (about US$44.3 billion) or 42 percent from the same period last year, the CIRC said.

Duan Hiazhou, CIRC's deputy head, said the falling returns were largely due to the gloomy stock market, decreasing interest rates and China's economic slowdown.

Even then, insurance premium income managed to reach Rmb1.88 trillion in the first half, up 37 percent from a year earlier, the CIRC said.

Also, the total assets of China's insurance industry rose 15 percent from the beginning of the year to Rmb14.27 trillion at end-June.

Earlier this month, CIRC imposed stricter controls on China's insurers.

It cautioned that companies are not "automatic teller machines" for major shareholders looking to finance acquisition sprees.

It also asked the industry to tighten risk controls, scale back on related party transactions and improve disclosure.

Earlier, the CIRC had asked for a go-slow approach in developing international insurance capital standards that would allow for jurisdictional control of implementation.

Representatives from the CIRC met with US officials from the National Association of Insurance Commissioners (NAIC) and the New York State Department of Financial Services at NAIC's New York office.

During the meeting, the Chinese insurance regulators, just like their US counterparts, agreed to push back against the plan of the International Association of Insurance Supervisors (IAIS) for global insurance capital reserve requirements.

If implemented, the standards would create new thresholds for the amount of capital that insurance companies have to hold on the side to cover potential failures of their holding companies or subsidiaries.

TagsInsurance China, China Insurance, China insurance regulatory commission, CIRC