Chinese insurance regulators have seized the Anbang Insurance Group in a sign that Beijing is cracking down on financial risk to rein in the country’s spiralling debt.

The decision to take control of the company for one year was taken with immediate effect to protect the interests of consumers and stakeholders of the private insurers, the China Insurance Regulatory Commission (CIRC) said.

State-owned Chinese news agency ECNS published a CIRC statement which read:

Illegal business practices by Anbang Insurance Group may seriously threaten the solvency of the company.

At present, business operations of the group are stable and interests of consumers and stakeholders have been protected.

At the same time the Shanghai prosecution said Anbang company chairman Wu Xiaohui, who was detained in June 2017, has been prosecuted for fraud and financial misconduct.

During the takeover Anbang Group will remain a private insurer while social capital will be injected to complete the company’s shareholder restructuring, the CIRC statement said.

As one of China’s most aggressive buyers of overseas assets, with deals worth over $30 billion, Anbang ran into difficulty in June last year for failing to close a number of overseas investments, according to Reuters.

In a high-profile acquisition the company bought the Waldorf Astoria in Manhattan for $1.95 billion in 2014.

Anbang chairman and key shareholder Wu Xiaohui is married to the granddaughter of late Chinese leader Deng Xiaoping.

The move is part of efforts by China to clamp down on insurers’ overseas financing activities to prevent the transfer of onshore assets to overseas markets.

In February China’s insurance and foreign exchange regulators issued a notice outlining new rules for insurers investing abroad and banned insurers from using onshore assets backed by debts as collateral for their overseas borrowing, according to ECNS.

As part of the new regulations, insurers must also report to the regulators on any overseas financing deals with a value exceeding $50m.