The Study Of The Regulation System Of The Insurance Industry

Insurance is an important industry in the modern society for it is closed to our daily life. It is a relatively short period in China since insurance came into China so there lacks experience on designing products and operating corporations. In order to promote the development of insurance, there must be a regulation system which coordinates to the market providing support. Only if the regulation system meets the requirements of the market can the insurance industry in China find its own way for the rapid and healthy development in the future.First of all, this paper introduces the background of the insurance industry and literature review. Following that, three theories on regulation including Public Interest Theory, Capture Theory and Regulation Theory are introduced in brief. Then in the third part, this paper lists the history of the regulation system in China and concludes the necessity of reforming the current system. In many developed countries, there are more mature insurance markets and logical regulation system on insurance. By doing research on the regulation system in more developed markets such as the U.S., Germany, The Great Britain Japan and Singapore, the paper concludes suggestions on the reformation of the current regulation system in China. In terms of the information economics, based on complete information static game theory, a game model made up of insurance companies and regulation institutions is shown in the fifth part. Combined the results from the game model and the theories introduced before, the paper considers that the demand for regulation from the companies will decrease and similarly the supply of regulation from the government will also reduce in the future. Taking the practical conditions into consideration, loosing the regulation and seeking for reforming the current regulation system on insurance are urgent and essential for the development of the whole industry.