China's largest insurers guilty of three billion yuan fraud

BEIJING: China's national auditor has revealed that two of the country's largest insurers committed financial misconduct involving over three billion yuan in 2009.

The revelations were contained in two reports published by the National Audit Office ( NAO).

The reports were produced last year after the NAO audited the 2009 financial reports of all subsidiaries and branches of China Life Insurance ( Group) Company (China Life) and People's Insurance Company (Group) of China Ltd ( PICC).

It found that the misconduct and non-compliance in operations and accounting included expense frauds, false premium increases and fake claim settlement cases, the China Daily reported.

The reports also cited other financial problems, including funds secretly kept off account books to avoid regulation. These funds are widely considered to be prone to corruption.

A total of 352 unidentified employees with the companies have been held responsible, and been punished, the reports said.