Study On China Life Insurance Company Under C-Ross

Our life is faced with variables of nature disasters and accidents, while kinds of risks and disasters occurred, our ancestors had the awareness of insurance, that is, taking advanced measures of distributing risks in order to deal with the unexpected loss. Initially insurance is a government action, the state forced people to take certain precautions, such as taxes. With the continuous improvement and development of the idea of insurance, coupled with the economic and social development and opening up, more and more commercial funds are added to insurance, commercial insurance companies have mushroomed and become more and more important.Our modern insurance industry started very late, although in1949the first domestic insurance companies have set up, but it had to be closed down due to historical reasons. Until1979, The People’s Bank of China began to restore the domestic insurance industry. Since then, China’s insurance industry began to develop rapidly.Original life and property insurance business is divided into two major types of insurance, and in recent years the original insurance premium income statistics showed life insurance premium income was significantly higher than the property insurance, the important status and role of life insurance industry determines the study on life insurance is of theoretical importance and practical significance. The insurance industry is a special business where claims are paid after risk premiums income. This characteristic determines that the insurance company must be have enough capital to assure to fulfill its obligations. For insurance companies and policyholders, solvency has the equal importance:for insurance companies, solvency is the basis for their security and stability operations; for policyholders, solvency is the guarantee of the premise of their rights. Therefore, the study about the life insurance company solvency is very important.Since1985our country started to manage the solvency of insurance companies, and set up the first generation of solvency regulatory system in2003.2012, China Insurance Regulatory Commission officially launched the construction of the second generation system solvency regulatory system, and in May2014began the first test in the insurance companies, the ultimate goal is to build a "oriented as well as value consideration" solvency regulatory system. It also marks the development and continuous improvement of our regulatory work in the insurance industry.This thesis’s theme is the life insurance company solvency. By reading literature of solvency at home and abroad, I understand the importance and significance of solvency regulation. The article took methods of literature research, combines of qualitative and quantitative analysis, combines of empirical research and normative research. First, the regulatory history and current situation of solvency of different countries are described and analyzed, and I noted its significance for our solvency regulatory system design:(1) design of the system should be combined with the actual environment,(2) laws and regulations must be developed timely,(3) complete insurance information disclosure system,(4) establish and improve risk management systems.The second generation solvency’s target is to build a regulatory system in the emerging market of insurance, help to improve the competitiveness of China’s insurance industry, complete a risk-based regulatory system. Therefore, both qualitative and quantitative research of risk is very important, risk management is an insurance company’s foundation to ensure its adequate solvency and stable business, and is the key to the success of an enterprise.In empirical research, I use structural equation modeling to make the research and analysis of the insurance company’s capital management capabilities factors’ influence on solvency and risk management of the insurance company,and made a number of recommendations:(1) internal ratings of investment assets, control the credit risk’s adverse effects on the assets,(2) insurance product differentiation and diversification, control the insurance risk’s adverse effects on the liabilities,(3) focus on preventing interest rate risk,and reduce its negative impact on the real capital, and (4)use market-value assess methods to assess the value of assets and liabilities, ensure consistency of assessment. Finally, based on the understanding of the second generation of the solvency, I believe that the future implementation of the second generation solvency system may help the insurance companies’risk management and market reform, but also a challenge to the insurance company’s management structure.Risk management is the foundation of an insurance company to ensure its adequate solvency and stable business, and is the key to the success of a business, so the research and management of risk has very important theoretical and research value.