BEIJING - China's top insurance watchdog decided to toughen supervision of the industry to guard against financial risks.

Insurance regulators at all levels should shore up weak parts of the regulation to build a strict and effective supervision framework, according to a statement released by the China Insurance Regulatory Commission on Sunday.

The statement pointed out that there are some loopholes in the current insurance regulation, which have given rise to risky practices in recent years such as disorderly buying of stakes and unchecked growth of risky business.

Chinese insurers grabbed headlines for using leveraged money to buy shares in listed companies, triggering sharp volatility in the market at the end of last year.

Insurance funds should not invest in risky products and there will be tougher supervision over equity changes of insurers.

Companies with risky business expansion will be targeted and regulators will blacklist senior management for practices that violate regulations and laws, according to the statement.

In February, China's insurance regulator barred Yao Zhenhua, chairman of Foresea Life Insurance, from the insurance sector for 10 years for irregular market operations.