A Study On Government Regulation Of The Insurance Industry In China

Insurance becomes more an important issue along with the development of economics and society.In recent years,with rapid economic and social development and market-oriented reform deepening,the positioning of insurance has been raised to an unprecedented historical height in the national governance system.In August 2014,the State Council's opinions on accelerating the development of modern insurance industry pointed out that,"Insurance is the basic means of great importance in modern economy and of risk management,as well as an important mark of social civilization degree,economic development level and social governance capacity".Government regulation is of great importance to the long-term sustainable development of insurance industry and the effective implementation of "economic booster" and"social stabilizer",thus the exploring of government regulatory insurance industry in accordance with China's reality and times demand has important realistic significance and far-reaching historical significance.Since the re-opening of China's insurance industry in the early 1980s,along with the deepening of reform and opening up,the entire industry has achieved a rapid growth in terms of the size and social influence.In this historical process,government regulatory has played a crucial role in the rapid and healthy development of China's insurance industry through the establishment and improvement of the market rules.Meanwhile,with the gradual deepening of the transformation on the models of social and economic development,government regulatory of insurance industry is now facing profound adjustments.On one hand,the insurance industry faces either over-regulation or a lack of regulation in its development,causing inevitable low vitality of industry and irregularities of management.On the other hand,a further study is needed on the new measures to improve the effectiveness of coordination in the actual circumstances of overlapped regulatory.From a theoretical perspective,as a sub department of national economy and an important part of financial industry,the insurance industry regulation follows the general rule of economic and financial control,classical control theories such as the public interest theory,regulatory capture theory and regulation economic theory having a powerful explanation on insurance regulation.Meanwhile,compared with other economy sectors,insurance industry has its own distinct characteristics;the theoretical circle in general stays still in the classical control theory phase,with lesser efforts in grasping the special pattern of insurance regulation,while this is the very efforts the article tries to make.Closely connected to the regulatory in this area and based on the systematic study about the existing regulatory policies with an integral vision,the paper analyses the status and the potential impact on the development of insurance industry,providing further policy suggestions to improve the regulatory.In the analysis,the paper also studies the experience and lessons from developed countries and regions,which provides a useful and practical basis for policy suggestions.The total of seven chapters of the paper,each from a different point of view,makes a comprehensive analysis about government regulatory of China's insurance industry.Chapter ? restructures the theory of government regulation of industry from two aspects of generality and particularity,and analyses its basic framework for the following analysis.From the general and special level of insurance regulation on the theoretical reconstruction,in the depth of the insurance industry,the paper grasps the characteristics of the groundbreaking proposed "conservative control","nurturing control","tangled control" and other insurance industry.Although the three aspects belong to the concept of "reality" of insurance control,the paper is also very enlightened on the "contingency" of insurance control.At the same time,this paper analyzes the current situation of the development of China's insurance industry from the practical level,and combs the aspects of China's insurance industry from six aspects:legal system,regulatory framework,regulatory main body,control function,control target and control mode.The paper analyzes the relationship between government regulation and non-government regulation in insurance industry,analyzes the changes of China's insurance industry control system in three stages,and summarizes the main characteristics and main problems of China's insurance industry regulation,laying the important foundation for the following analysis.Chapter ? is about the regulatory on market access,with the principal analysis on the entry end of the market and study of the impact on the whole system.Mainly from the market at the entrance to the implementation of insurance control analysis,describes the impact of regulation on the market system.Compared with other industries,the insurance market access control has a universal reason,there are special reasons,summed up mainly to prevent excessive competition,control market risk,ease information asymmetry,to avoid higher market exit costs,to ensure that the market open.China's insurance industry market access control has undergone strict restrictions,gradual relaxation and prudent tightening of the three stages in the control policy on the performance of direct and indirect access control parallel,multi-level market access control both market access standards.Gradually refine and improve the characteristics.From the control of the impact of the higher access standards is not conducive to get rid of the market a high degree of monopoly,the preference for state-owned capital is not conducive to the formation of multi-level capital structure,direct access control is not conducive to improving social welfare,the national unified market access standards.At the same time,access control is facing higher standards,the details of the fuzzy,over restricted and other prominent issues.Chapter ? mainly analyses the rate-regulated insurance products,specially the impact of price controls on operating efficiency of insurance companies and on consumer behavior.Mainly analyzes the impact of price control on the operating efficiency and consumer behavior of insurance companies.Rate control is the form of price regulation in the insurance industry.The starting point is to ensure the appropriateness,impartiality,stability,incentive and rationality of pricing of insurance products.The essence of the insurance product rate is to solve the relationship between the actual risk exposure and the risk premium determination.The basic principles of the different types of insurance products and rates are consistent,but the specific method and the main consideration are not the same,so the life insurance product and property insurance product rate determination has different characteristics,and the implementation of differentiated policies.On the whole,China's implementation of the insurance products is the minimum price control.In addition,China's premium rate control is in the initial stage of transition,the problem of high insurance premium rates still exist,although regulators clear the generalization of the rate of market-oriented reform,but in some areas the old regulatory system is still implementation,mercerization of the intensity and pace is not suited to the requirements of reality.Chapter IV is the analysis of the use of funds,and its development under the regulatory and the possible influences to the management and market running.Analyzes how insurance funds are used to develop changes under the control and affect other aspects of management and market operations.The use of insurance funds is different from the ordinary investment behavior,which is not the pursuit of high income as the sole goal,but to achieve the basic functions of insurance coverage for the purpose of the liquidity and security of the higher requirements.At present,the use of insurance funds in China shows a rapid increase in the scale of the use of funds,asset allocation structure is optimized,investment yield gradually stabilized trend.From the control process,China's insurance fund control generally experienced the initial exploration,the initial formation of the framework,the overall development and moderately loose four stages,the current mainly to relax the market access,relax investment,reduce investment threshold,relax the restrictions,control and other regulatory policies,these policies play a significant positive role in promoting.But to a certain extent also contributed to the investment rate of return is too large,the overall yield is low,asset allocation convergence,mismatch problems highlighted and other adverse effects.In general,China's insurance funds use control has been a lot of substantial progress,but there are slow progress in the reform of the registration system,the lack of flexibility in the policy,"glass door" and other issues,while regulators themselves are facing reform and transformation the urgent need.Chapter V analyses the insurance market exit control with a fully and systematically briefing about the existing dispersive exit control policies.This paper systematically combs the existing decentralized exit control policy and analyzes its impact on the mercerization of the insurance industry.Insurance companies are different from the general non-financial enterprises,the market exit often have a greater "negative externalities".The insurance company's market exit costs are higher,and in order to effectively play the basic functions of market allocation of resources to protect the insurance consumers interests,it is necessary to exit the insurance market to implement relatively strict control,which is the international practice.China has no specific legislation to withdraw from the market of insurance companies,mainly based on administrative directives,has initially established a multi-level,and solvency to connect with the insurance to protect the security of the insurance system,fund system to support the market exit mechanism.From the control effect,the market disposal efficiency is low,the high cost of disposal,the further liberalization of market access and the further advance of the rate mercerization are restricted.From the control system,China's insurance market exit regulation is a lack of systematic and operational legislation,the current bankruptcy laws do not fully consider the specificity of insurance companies and other issues.Chapter VI presents the regulatory status of some countries and regions,and a comparative study on the characteristics of the major developed countries and regions,based on which came up with the effective experience.This paper analyzes the characteristics of the insurance industry in major developed countries and regions,and makes a comparative study,and puts forward the effective experience which can be used for reference.Horizontal comparison,whether it is the United States double regulation model,the British loose control model,or Japan's strict control model,or South Korea's one double control model,are with their own history,law,culture,etc.are closely related,and mode is not static,but in the process of dynamic adjustment and improvement.For China's insurance industry regulation,different models also have their consistency of reference,such as strengthening the protection of the interests of insurance consumers,and constantly improve the solvency control mechanism system,focusing on macro-prudential and micro-prudent organic combination of market is the insurance business and insurance control of the general trend.Chapter VII offers the suggestions on insurance industry regulatory reform and policy making based on the summary of the main characteristics and problems related to further clarify of concepts.On the basis of summing up the characteristics and problems of China's insurance industry,the author puts forward some suggestions on the above analysis.From the top-level design of China's reform,the market-oriented reform is a big strategic direction.The Third Plenary Session of the Eighteenth Central Committee of the Communist Party of China(CPC)has made a comprehensive layout of comprehensive reform.Insurance is an important industry of modern economy.Insurance control is one of the government's allocation of resources.Kind of way,we must also adhere to the market direction and path of reform.The core objective of the insurance industry's regulatory reform is to protect the interests of insurance consumers and to guard against insurance market risks.In the face of the overall lag of the development of the industry,the weak capital strength,the low level of management and the low level of insurance culture,China's insurance industry must adhere to the core,step by step,overall consideration,system implementation and classification promotion principle.Strategy to gradually relax the market access,and further promote the pricing of insurance products and insurance funds to use the market regulation of the reform,and gradually optimize the insurance market exit mechanism,while the insurance industry control system to the necessary reforms,and continue to strengthen the non-governmental regulatory role of the insurance industry associations as the subject of the implementation.