The insurer said the order is not expected to have a material adverse impact on its financial operations at this stage, as it intends to challenge the decision.
The reforms are expected to improve market discipline and product governance, although Moody's says changes will take longer to materialise than in motor insurance.
The city will fund half the premium, up to 1m yuan (US$150,000) per company each year, and has launched an SME package where 9,800 yuan buys 5.5m yuan of cover.
The regulator also wants insurers and other financial institutions to demonstrate how geopolitical risks are embedded in strategy, risk appetite and board oversight.
