BEIJING - China's top insurance regulator has begun to check the "barbaric" behavior of insurers as the government pushes to control financial risks brought about by speculative stake buyouts.

China Insurance Regulatory Commission (CIRC) on Monday ordered Foresea Life Insurance, a subsidiary of financial conglomerate Baoneng, to stop offering its "questionable" insurance product.

The authorities are concerned that the product, which promises high returns, is more akin to a wealth management product than an insurance product.

The CIRC put a halt on the insurer's cash-cow business just two days after the head of the securities regulator condemned leveraged acquisitions by some asset managers using questionable funds as "barbaric."

Any attempt to acquire a majority stake in a listed firm using funds from questionable sources is crossing the line, said Liu Shiyu, head of China Securities Regulatory Commission. The statement was seen by many as a thinly-veiled allusion to a recent slew of high-profile A-shares acquisitions, such as a bid by property developer China Evergrande Group to acquire a 14.07 percent stake in its peer China Vanke Co Ltd.

Insurers such as Anbang and Funde Sino Life have also initiated stake buyouts of listed-property developers and undervalued blue-chip companies since 2013. Insurers had bought stakes in about 120 listed companies by the end of November, raising market and regulator concerns.

It has been argued that the stake buyouts this year were driven by lower returns on fixed-income products, forcing many insurers to seek higher profits in the equity market to cover rising costs, according to Cao Deyun, secretary of Insurance Asset Management Association of China.

It must be said that insurers' focus on long-term and value-based investment on the stock markets is, on paper, good news for the market. The problem arises, however, when insurers overly rely on investment-related services, and use speculative investment to turn a quick profit -- bad habits that might be emulated by other institutional investors, Cao added.

Meanwhile, the inflow of short-term speculative insurance capital into the stock market could have an adverse affect on the structure and management of the listed companies concerned, and result in wild market fluctuations.

Dong Mingzhu, board chairman with China's leading appliances maker Gree Electric Appliances, suggested that investors should profit from the growth of the real economy rather than speculative investment, as any change to the structure and management of firms could hurt the sector, manufacturing in Gree's case.

The Gree share price has been on a roller coaster ride over the past three trading days. It shot up by as much as ten percent last Thursday after Foresea raised its stake in the company by more than 3 percent, and then plunged by ten percent on Monday after Liu's remarks dampened market sentiment.

Speculative stake buyouts are not technically illegal and are, for now, a regulatory grey area. The increase in their frequency has not gone unnoticed, however, and next on the agenda for the country's financial regulators is drafting a detailed regulatory framework for stake acquisition.

To this end, China could look to other countries for inspiration. Other markets ask large stakeholders of listed companies to report big buying or selling moves to the public to ensure investors are informed and to avoid wild price swings, said Gui Haoming, head of the research department with Shenwan Hongyuan Securities.

Wang Guojun, an insurance professor with the University of International Business and Economics, said better intra-government collaboration and communication would help define clear rules for stake buyouts.

In the first ten months of the year, 14.4 percent of insurers capital was used to buy to purchase stock and securities' products. The CIRC is expected to roll out more policies to regulate the use of insurance capital.