BEIJING, March 1 (Xinhua) -- A Chinese credit rating firm has warned that the country's insurance sector is facing accumulating credit risks due to the over-issuance of subordinated debt in recent years.
The solvency and liabilities of major insurance companies are incapable of supporting more debt issuance, Dagong Global Credit Rating Co. announced Friday.
Capital raised by Chinese insurance firms through debt surged to 94.5 billion yuan (15.05 billion U.S. dollars) last year, up from 14.5 billion yuan in 2009, Dagong noted.
Life insurance companies, which were heavily affected by China's slowing economic growth, have had the greatest difficulties in repaying their debts, the rating agency said.
If risks break out, the crisis could spread to other sectors and even weigh on the entire financial industry, as banks and other insurance institutions have purchased the most debt, Dagong said.
Dagong advised companies to enhance their capital management and solvency, as the government rolled out an array of measures to help debt-ridden insurers in 2012.