This research first reviews the basic theories on risk management of entrusted assets, practices of similar institutions, and the related risk management system of the China Insurance Security Fund (CISF). An analysis on the risk appetite and administrative requirements of CISF have helped summarize the past experiences and lessons on managing these risks. Additionally, this research has proposed the top priorities of CISF in enhancing the risk management system for entrusted assets, as well as the corresponding policy recommendations on how to achieve that goal in the next phase.  

This research concludes that, by establishing relevant risk management system and mechanisms and incorporating investment managers, trustees, and other relevant institutions into the risk management process, CISFC has tentatively achieved effective supervision of the compliance, internal control, credit, operational, market and ethical risks in its own entrusted asset management business. This research proposes that in the next phase, CISFC should continue to improve its risk management system to proactively adapt to market developments, refine mechanisms to better regulate its risk management processes, and strengthen the supervision and administration of investment managers, trustees, and other relevant institutions.