中国保险与风险管理研究中心
China Center for Insurance and Risk Management
Development and Regulation
of China's Insurance Market
Bingzheng Chen
Sharon Tennyson
Maoqi Wang
Haizhen Zhou
Content
• 1. Introduction
• 2. China’s Insurance Market
•2.1 Market Size and Development
•2.2 Insurance Market Structure
• 3. China’s Insurance Regulatory System
• 4. Evolution of Insurance Regulation and Supervision
•4.1 Capital utilization regulations
•4.2 Solvency Regulation
•4.3 The Insurance Protection Fund
•4.4 Market Surveillance
•4.5 Disclosure and Consumer Protection
• 5. New Perspectives of Insurance Regulation in China
率先获得AACSB和EQUIS两大全球管理教育顶级认证的中国内地商学院
The first school on the Chinese mainland to attain both AACSB and EQUIS accreditation
Introduction
• A fast-developing market
• An opening, modernizing regulatory system
• A special Political-Economic Scheme
• Why is China regulating Insurance Industry like this?
• How should we study China’s Insurance Regulation
• What is the future of China’s Insurance Regulation
率先获得AACSB和EQUIS两大全球管理教育顶级认证的中国内地商学院
The first school on the Chinese mainland to attain both AACSB and EQUIS accreditation
China’s Insurance Market
Annual Insurance Premiums, yuan, billion
GDP Growth, nominal, %
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
0.00
1996
0.00
1995
200.00
1994
0.10
1993
400.00
1992
0.20
1991
600.00
1990
0.30
1989
800.00
1988
0.40
1987
1000.00
1986
0.50
1985
1200.00
1984
0.60
1983
1400.00
1982
0.70
1981
1600.00
1980
0.80
Premium Growth Rate, nominal, %
• Rapid Growth Rate
nominal insurance premiums increased from 460 million yuan in 1980 to 1.45 trillion
yuan in 2010, an average annual premium growth rate of over 30%, compared to a
nominal GDP growth rate of 16%.
率先获得AACSB和EQUIS两大全球管理教育顶级认证的中国内地商学院
The first school on the Chinese mainland to attain both AACSB and EQUIS accreditation
China’s Insurance Market
25.00
X: insurance density
Y: insurance penetration
Size: insurance premium
20.00
15.00
10.00
China
5.00
0.00
0.00
1000.00
2000.00
3000.00
4000.00
5000.00
6000.00
7000.00
8000.00
Insurance Market of Each Country
• Still Un-Developed
China ranked 61st in insurance density and 39th in insurance penetration among world
economies in 2010.
率先获得AACSB和EQUIS两大全球管理教育顶级认证的中国内地商学院
The first school on the Chinese mainland to attain both AACSB and EQUIS accreditation
China’s Insurance Market
Year
Insurance Provincial
Companies Subsidiaries
Branches
HHI of China’s HHI of China’s
Non-life Insurance Life Insurance
Market
Market
2001
36
-
-
5700
4150
2004
60
-
-
3900
3200
2007
102
941
57191
2400
2400
2010
126
1294
68061
1850
1800
• Relatively Concentrated
In 2010 the non-life insurance HHI was 1850 and the HHI for life insurance was 1800.
U.S. Department of Justice merger guidelines categorize markets with HHI greater
than 1800 as “concentrated” (DOJ/FTC 1997).
率先获得AACSB和EQUIS两大全球管理教育顶级认证的中国内地商学院
The first school on the Chinese mainland to attain both AACSB and EQUIS accreditation
China’s Insurance Regulatory System
People's
Bank of
China
1949
Ministry of
Finance
1952
1979
People's
Bank of
China
People's Bank of
China-Insurance
Division
1995
China Insurance
Regulatory Committee
2009
1998
The Insurance Law of
People's Republic of
China
率先获得AACSB和EQUIS两大全球管理教育顶级认证的中国内地商学院
The first school on the Chinese mainland to attain both AACSB and EQUIS accreditation
The New Insurance
Law of People's
Republic of China
China’s Insurance Regulatory System
The National People's Congress
Government
The State Council
China Insurance Regulatory Commission
Regulator
Branch
Offices
Branch
Offices
Branch
Offices
Branch
Offices
Insurance Companies
Insurance Intermediaries
Consumers
Legal Supervision
Social Monitoring
Market Players
Self-discipline
Mechanism
率先获得AACSB和EQUIS两大全球管理教育顶级认证的中国内地商学院
The first school on the Chinese mainland to attain both AACSB and EQUIS accreditation
Evolution of Insurance Regulation and Supervision
• 4.1 Capital utilization regulations
“Insurance Law”
“Temporary Regulations on the
Securities Investment Fund of
Insurance Companies ”
“Temporary Regulations on
Securities Investment of Insurance
Institutes”
“Administrative Measures on
Indirect Investment in Infrastructure
Projects Pilot of Insurance Capital”
“Temporary Administrative
Measures of Overseas Investment of
Insurance Capital”
the Second Revision of the
“Insurance Law”
1995
Only in bank deposits, government bonds, financial bonds and other
funds stipulated by the State Council
1999
Could in security funds, but the proportion and qualification of these
investment should be approved by the CIRC.
2004
Could invest in securities through market subscription and the
secondary market transactions.
2006
Infrastructure projects. The balance of investment should not
exceed5% the total assets in the last quarter of a life insurance
company, while 2% for a property insurance company.
2007
Could make foreign investment with the foreign reserves of its own
or purchased from banks.
2009
Insurance companies could invest in real estate.
“Temporary Administrative
Measures of Utilization of Insurance 2010
Capital”
Security and security funds investment should not exceed 20%; the
proportion of real estate investment should not exceed 10%; The
sum of real estate related securities investment should not exceed
3%; the proportion of real estate and real estate related securities
investment should not exceed 10%, etc.
率先获得AACSB和EQUIS两大全球管理教育顶级认证的中国内地商学院
The first school on the Chinese mainland to attain both AACSB and EQUIS accreditation
Evolution of Insurance Regulation and Supervision
• 4.2 Solvency Regulation
“Insurance Law”
1995
Entry into WTO
2001
The Insurance Law
modification
2002
2008
only basic guidelines regarding minimum
solvency
requirements
for
insurance
companies
A ratio-based solvency monitoring system,
specifying the calculation of ratios, and
standards for recognizing assets. It also
established measures for dealing with
distressed or insolvent insurance companies
Additional strengthening of this system by
revising the solvency ratios and requiring
insurers to submit a periodic report on
solvency ratios
a dynamic risk-based solvency regulatory
framework consistent with international
standards.
率先获得AACSB和EQUIS两大全球管理教育顶级认证的中国内地商学院
The first school on the Chinese mainland to attain both AACSB and EQUIS accreditation
Evolution of Insurance Regulation and Supervision
• 4.3 The Insurance Protection Fund
2005
China established an insurance guaranty fund (the Insurance
Protection Fund, IPF) in January 2005. The fund was initially
managed by CIRC under the oversight of an IPF Council
consisting of representatives of insurance companies, the
Legislative Affairs Office of the State Council, Ministry of
Finance, the People’s Bank of China and others.
2007
China Insurance Protection Fund Ltd. Co. was established.
2008
established rules for the major business operations, governance
structure, financing and information sharing activities of the
Protection Fund management company.
2011
•Xinhua Life Insurance Company, CEO fraud problem, 22%
percent of its shares, successful rescue action
•China United Insurance Company, historical poor performance,
57%, not completed yet
率先获得AACSB和EQUIS两大全球管理教育顶级认证的中国内地商学院
The first school on the Chinese mainland to attain both AACSB and EQUIS accreditation
Evolution of Insurance Regulation and Supervision
• The trend of regulatory evolution:
• Modernized
• Internationalized
• Consumer-based
“the regulators used to be the coaches of the industry, who
are concerned with building the market; but in the new era,
insurance regulators should act more like judges, whose
efforts should change from market construction to market
supervision”
-- Dingfu Wu, former president of CIRC, 2010
率先获得AACSB和EQUIS两大全球管理教育顶级认证的中国内地商学院
The first school on the Chinese mainland to attain both AACSB and EQUIS accreditation
New Perspectives of Insurance Reg. in China
1. How should we position China’s Insurance Regulator?
•
Public Interest Theory (Social Planner)
•
Private Interest Theory (Rent Seeking, Capture or special interest?)
2. Does the Regulator have Institutional Weakness?
•
Limited Regulatory Capacity
•
Limited Accountability
•
Limited Commitment
•
Limited Fiscal Efficiency
率先获得AACSB和EQUIS两大全球管理教育顶级认证的中国内地商学院
The first school on the Chinese mainland to attain both AACSB and EQUIS accreditation
率先获得AACSB和EQUIS两大全球管理教育顶级认证的中国内地商学院
The first school on the Chinese mainland to attain both AACSB and EQUIS accreditation