China Life Insurance Securitization

With the development of the financial technology, the content of securitization is richer and richer. It is being applied more and more widely. In the trend of global mixed financial business, the insurance industry is inevitably impacted by the capital market. The interactive development of insurance market and capital market in China is not only the objective requirement for financial system development, but also even more an inevitable choice that the insurance industry realizes sustainable development after our country enters the WTO. At present, catastrophic risk securitization has been relatively mature, but the life insurance securitization is relatively slow development. In 2004,the work paper which named Securitization of Life Insurance Assets and Liability by Professor J. David Cummins,the Wharton Financial Institution Center, has formally opened the curtain of life insurance securitization. For our domestic scholars, the area of life insurance securitization involved was fresh, relevant research results is a handful. The purpose of this paper is to arouse people of our country to pay more attention to the life insurance securitization. This paper could play role in promoting the development of this kind of financial innovation. It could pave the way to the future introduction of life insurance securitization.There are four chapters in this paper. The first chapter presents a definition of the life insurance securitization and provides an introduction to the principle and the process of it and its products. The second chapter, from the perspective of the problem of insufficient solvency in China's life insurance companies, this paper does some analysis on the necessity of China's implementation of life insurance securitization. The third chapter analysis on the necessity of China's implementation of life insurance securitization on the base of the successful experience of asset securitization in China, finally, this paper provides the path selection of life insurance securitization. The major discussed issues include the choice of basic cash flow, the choice of special purpose vehicle (SPV) and the mode of credit enhancement.This paper realized the combination of theory and practice, foreign experience and domestic reality. Especially, life insurance securitization plays an important role in resolving the problem of the insufficient solvency. This paper researched on the implementation of China's Life Insurance securitization of the necessity, feasibility and path selection. This has important theory and practical significance to the liberation of future business ideas, to plan for the future development and to the introduction of a comprehensive financial innovation.