The country's top insurance regulator on Wednesday released an action plan to resolve major risks in the industry, vowing to tighten regulation of insurers' shareholders, and to take action against poor corporate governance and risky capital management and investment.

The regulator has set a three-year period to accomplish the tasks, including preventing systemic risk, cracking down on illegal businesses and taking more effective measures against foreign insurers that fail to meet solvency requirements and to address long-delayed problems, according to the plan posted by the China Insurance Regulatory Commission on its website.

The move was part of China's ongoing efforts to curb systemic financial risks after the central authorities made it a top priority during the Central Economic Work Conference held last month.

The CIRC vowed to clamp down on illegal financing and equity investment by insurers, irrational mergers and acquisitions, speculative trading of stocks, radical investment in real estate through highly-leveraged and structured financial products as well as illegal overseas investment.

"Some key areas and companies are exposed to rising risks and various irregular and chaotic activities have emerged," the regulator said, adding that risks including the lack of effective corporate governance, weak capital position as well as risky new insurance business cannot be ignored.

The CIRC has also targeted major shareholders, pledging to carry out thorough inspection into their background and external connections, and urged the insurers to hold their senior executives accountable.

Guo Jinlong, a researcher at the Research Center for Insurance and Economic Development of the Chinese Academy of Social Sciences, said that the CIRC's action plan was a timely move to contain the risky and aggressive business expansion and investment by some insurers.

"Some insurers have raised huge amounts of capital by selling new and risky insurance products and they use the proceeds to aggressively purchase stocks of listed companies, which have increased risks in the capital market and have had a negative impact on the operation of the listed companies," Guo said.

Several risky incidents over the past year have shocked the market, including the fallout of a debt default scandal by telecommunication firm Cosun Group that involved Zheshang Property and Casualty Insurance Co. The insurer, which offered insurance guarantee for the bond sale, was banned by the CIRC from carrying out new insurance guarantee business for one year.