The insurance industry sees its first bond default case.

On September 30, TIAN AN Property Insurance Co., Ltd. (hereinafter referred to as "TIAN AN Property Insurance") issued an announcement stating that the company's 2015 capital supplementary bond (abbreviated as "15 TIAN AN Property Insurance") was due for redemption on September 30, 2025, but the bond is expected to be unable to repay principal and interest.

The reason for the expected inability to repay principal and interest is that the company cannot ensure that the solvency adequacy ratio will not be less than 100% after paying the principal and interest of this bond, and that it has the ability to repay the principal and interest of other debts.

**First Bond Default Case in the Industry**

TIAN AN Property Insurance stated in its announcement that according to the capital supplementary bond issuance announcement, the company can only repay the principal and interest of this bond under the premise of ensuring that the solvency adequacy ratio is not less than 100% after repaying the principal and interest, and that it has the ability to repay the principal and interest of other debts.

As of September 30, 2025, the company cannot ensure that the solvency adequacy ratio will not be less than 100% after paying the principal and interest of this bond and that it has the ability to repay the principal and interest of other debts. Therefore, the company cannot repay the principal and interest of this bond to the bondholders.

The announcement shows that the company has actively communicated with the bondholders of this bond, fully cooperating with the relevant demands of bondholders, and will make coordinated arrangements and handle this bond in the company's risk disposal work in the future.

The bond issuer TIAN AN Property Insurance was established in 1995. "15 TIAN AN Property Insurance" is a capital supplementary bond issued by TIAN AN Property Insurance on September 29, 2015, with a total issuance amount of 53 billion yuan. It is a 10-year fixed-rate bond with conditional issuer redemption rights at the end of the fifth year.

The bond coupon rate adopts a segmented interest calculation method, with a coupon rate of 5.97% for the first 5 years. If the issuer does not exercise the redemption right, the coupon rate for the latter 5 years is the original coupon rate for the first 5 interest years plus 100 basis points (1%), which is 6.97%.

The bond issuance period is from September 29, 2015, to September 30, 2025, the interest accrual period is from September 30, 2015, to September 29, 2025, the interest payment date is September 30, 2017, and the redemption date is September 30, 2025.

The 2015 issuance documents show that the debt repayment risk of issuing capital supplementary bonds is mainly reflected in the temporary liquidity pressure faced when paying interest on time and repaying principal in a lump sum upon maturity.

In terms of debt repayment order, the principal repayment order and interest payment order of this bond are listed after policy responsibilities and other ordinary debts, but before equity capital and other core capital instruments. This bond is in the same repayment order as other subordinated debts with the same repayment order as this bond already issued by the issuer.

Query records show that after the bond issuance, TIAN AN Property Insurance paid interest on schedule from 2016 to 2019.

On July 17, 2020, because TIAN AN Property Insurance and other companies triggered the takeover conditions stipulated in relevant regulations, in order to protect the legitimate rights and interests of insurance activity parties and trust parties and maintain social public interests, the former China Banking and Insurance Regulatory Commission lawfully implemented takeover of TIAN AN Property Insurance and 5 other "Tomorrow Group" institutions.

In September of that year, TIAN AN Property Insurance issued an announcement stating that it would not exercise the redemption option and said that the company was under takeover by the former China Banking and Insurance Regulatory Commission and was conducting asset liquidation and verification work, with "15 TIAN AN Property Insurance" interest being suspended. From 2021 to 2024, "15 TIAN AN Property Insurance" continued to suspend interest accrual.

TIAN AN Property Insurance's risk resolution made important progress in 2024. TIAN AN Property Insurance's insurance business was transferred to Shenneng Property Insurance Co., Ltd. (abbreviated as Shenneng Property Insurance), which was established in January 2024, opened for business in May 2024, with a registered capital of 10 billion yuan.

On July 28, 2024, Shenneng Property Insurance and TIAN AN Property Insurance signed an "Acquisition and Undertaking Agreement" for Shenneng Property Insurance to acquire TIAN AN Property Insurance's insurance business asset package. In September 2024, the National Financial Regulatory Administration agreed to Shenneng Property Insurance's undertaking of TIAN AN Property Insurance's insurance business. However, it is understood that "15 TIAN AN Property Insurance" does not belong to insurance business.

**Company's Insurance Business License Has Been Revoked**

Due to multiple illegal and irregular behaviors, TIAN AN Property Insurance had its business license revoked by regulatory authorities in June this year.

On June 13, the National Financial Regulatory Administration's official website published administrative penalty information involving TIAN AN Property Insurance, TIAN AN Life Insurance, and their related responsible persons. Among them, TIAN AN Property Insurance and TIAN AN Life Insurance had their business licenses revoked, and multiple responsible persons were banned from the industry.

The administrative penalty information disclosed the main illegal and irregular behaviors of TIAN AN Property Insurance and TIAN AN Life Insurance, all involving major issues such as untrue corporate governance and transferring benefits to related parties.

Among them, the main illegal and irregular behaviors of TIAN AN Property Insurance include: corporate governance reports not matching actual situations, some proposed senior management personnel performing duties without obtaining qualification permits, illegally transferring benefits to related parties through trusts, deposits, wealth management, and equity fund investments, failing to use approved insurance terms and insurance rates as required, and providing false reports, statements, documents, and materials to regulatory authorities.

The main illegal and irregular behaviors of TIAN AN Life Insurance include: untrue corporate governance reports, false statements in directors' due diligence reports, untrue compensation management reports, senior management performing responsibilities without obtaining qualifications, illegally using investment assets for guarantees or providing loans, and illegally transferring benefits to actual controllers through related party transactions.

Based on the above illegal and irregular behaviors, the National Financial Regulatory Administration imposed corresponding penalties on TIAN AN Property Insurance, TIAN AN Life Insurance, and related responsible persons. At the company level, according to the Insurance Law and other relevant regulations, the business licenses of TIAN AN Property Insurance and TIAN AN Life Insurance were revoked. Regarding responsible persons, penalties were imposed on 16 responsible persons of TIAN AN Property Insurance, including warnings and fines, as well as revocation of qualification and industry bans. A total of 19 responsible persons of TIAN AN Life Insurance were penalized.