The China Insurance Regulatory Commission said Anbang, which has made a series of high-profile foreign acquisitions in recent years, had violated insurance regulations and operated in a way that may "severely" affect its solvency.
Anbang has purchased a number of landmark properties globally but it entered the U.S. real estate market with its purchase of Waldorf Astoria for a record setting $1.95bn in 2014.
China took over Anbang Insurance Group for a year on Friday and said its former chairman faces prosecution for "economic crimes" as the government stepped up its battle against corruption and excessive corporate debt.
Wu's duties as chairman and general manager would be redistributed and a working committee established in conjunction with the People's Bank of China, the China Banking Regulatory Commission, the Foreign Exchange Bureau and other departments to handle the management takeover process and ensure smooth operations, the statement said.More news: Statement on International Mother Language Day
China has taken over Anbang insurance for a year today and is prosecuting its chairman for "economic crimes". It didn't specify what those activities were.
Blackstone didn't immediately respond to a request for comment from Travel Weekly on Friday.
China's insurance law stipulates that an insurance firm can be taken over by regulators if it is insolvent, or illegal activities hurt the public interests and threaten its solvency. "The legitimate rights and interests of insurance consumers and individual stakeholders are being protected effectively".
Regulators have yet to decide what to do about Wu's own equity in Anbang, although staff have said they believe it is worthless without official government support.More news: Honda Classic forecast for Thursday
Chinese authorities have been cracking down on the financial industry to guard against excessive borrowing and risk. The companies, including Dalian Wanda Group, HNA Group and Fosun International, bought up everything from hotels to banks to movie production companies. But Wang is much more focused on offloading parts of his global empire these days.
After previously encouraging its companies to seek their fortune in foreign markets, China has abruptly changed course, announcing previous year restrictions on overseas investments in sports teams, real estate, entertainment and other sectors.
Experts said Chinese leaders were anxious about risks to the country's financial system from the debts the companies were running up and the flood of money that had been pouring out of the country.
Domestically, Anbang has stakes in China Minsheng Bank and real-estate holdings that include a stake in developer China Vanke. Members of the U.S. Congress have previously raised concerns about the opaque insurer's ties to the Chinese government. In addition to Waldorf Astoria, Anbang paid US$6.5 billion for Strategic Hotels and Resorts, owner of 18 luxury hotels including the Four Seasons in Washington, and purchased life insurance companies in South Korea and Europe, and a large retirement home chain in Canada. That heightened liquidity risks and the potential for a duration mismatch between assets and liabilities for Anbang, whose investments included real estate investments that are often locked up for years.More news: The Deadly Flu Season Has Killed 84 Children In The United States