Chinese insurance stocks tumble as Beijing targets the industry with tougher regulations

China Banking Regulatory Commission in Beijing. Thomson Reuters After Beijing tightened regulations in the industry, Chinese insurance stocks dropped on Thursday. Insurance companies were directed to stop unethical pricing and marketing practices and to protect the privacy of users. China's insurance and banking regulator stated that failure to comply with regulations would lead to "severe punishment." Subscribe to our daily newsletter 10 Things Before The Opening Bell. According to media reports, China's online insurance stocks plummeted on Thursday as a regulator indicated that it would be intensifying its scrutiny of the sector. This is part of a larger crackdown on China's technology sector. Insurers and local agencies were ordered by the Chinese banking-and-insurance regulator to limit misleading marketing practices, curb exorbitant fees, and protect user privacy, Bloomberg reported, citing a notice. These individuals were told to address the issues voluntarily and that they would face severe punishment if they failed to do so. Hong Kong-listed shares of ZhongAn Online Property & Casualty Insurance in Hong Kong fell as high as 11% Thursday, while Ping An Insurance Group stock dropped by as much as 3%. This regulator's action came after China's State Council (and the Communist Party Central Committee) jointly published a five-year blueprint that outlines increased supervision in key areas like national security, technology and monopolies. Jeffrey Halley, OANDA's senior market analyst, stated that while some Chinese equities might have suffered on the news, investors are becoming more accustomed to the new normal. China began a broad crackdown on fintechs in China this year. The country was trying to tighten its grip over services that suddenly faced new compliance challenges. Increased scrutiny has impacted shares in many of China's largest companies like Tencent Holdings and Ant Group, as well as edtech and ride-hailing companies like Didi. Read more: A 30-year veteran of futures trading explains his contrarian approach to beating the market against all odds. He also shares 2 trades that are on his radar right now