China's banking and insurance regulator announced on Thursday that a new insurer has been set up to take over the assets of Anbang Insurance Group as part of stronger regulatory efforts to manage financial risk.

Approved by the China Banking and Insurance Regulatory Commission, Beijing-based Dajia Insurance Group was jointly established on June 25 by China Insurance Security Fund Co, SAIC Motor Corp and Sinopec, with a registered capital of 20.36 billion yuan ($2.97 billion).

The shareholding of the three companies in Dajia is 98.23 percent by CISF, 1.22 percent by SAIC and 0.55 percent by China Petrochemical, said the National Enterprise Credit Information Publicity System.

The establishment of Dajia Insurance Group signifies that the risk disposal of Anbang Insurance Group has achieved "phased progress", the regulator posted on its website.

The equities of Anbang Life Insurance, Anbang Pension Insurance and Anbang Asset Management Co will be transferred to Dajia Insurance Group. Dajia Property & Casualty Insurance will also be formed to take over part of the insurance business, assets and liabilities of Anbang Property & Casualty Insurance, the commission said.

The regulator took control of Anbang Insurance Group on Feb 23, 2018, after its business operations were found to be in violation of regulations and laws.

The group that takes over Anbang will push ahead with Daijia's participation in the restructuring of Anbang to provide health insurance, pension insurance and asset management services to the public. It will also promote the introduction of qualified strategic investors to Anbang, the commission said.

Meanwhile, Anbang will carry out obligations of its existing insurance policies to protect the lawful rights and interests of its clients. The insurer will not launch new insurance business after the restructuring process is completed, the regulator said.

Regulatory authorities have ramped up efforts to deal with high-risk financial institutions. At a news conference held by the State Council Information Office on July 4, Liang Tao, vice-chairman of the commission, said the regulator has resolutely insisted on the disposal of Anbang's overseas assets that are not highly synergistic with its main business as well as its non-core financial licenses based on market principles and the rule of law.

Until now, assets of the group worth more than 1 trillion yuan have been or are being stripped, causing a significant decline in its total assets, Liang said.

The regulator also took measures to reduce the size of short and medium-term wealth management products issued by Anbang to make the insurer refocus on its core insurance business.

"Next, the commission will accelerate Anbang's asset disposal and the transformation, splitting and restructuring of its business to better handle risks associated with the insurer in a steady and orderly manner," Liang said.

The regulator has tightened control over financial market irregularities and increased penalties accordingly.

Over the past two years, fines levied and assets confiscated by the regulator totaled more than 6 billion yuan with over 8,000 rule violators penalized, said Zhou Liang, another vice-chairman at the commission.

"Through combined efforts of various market participants, we have gradually mitigated the risks associated with high-risk financial institutions," Zhou said.

Over the past two years, high-risk financial assets decreased by 13.74 trillion yuan due to dismantling of risks related to shadow banking activities. In this way, the regulator has restrained the flow of financial resources from the real economy, the part of the economy that produces goods and services, to the virtual economy, he said.