A Study On The Auto Insurance Market-Oriented Reform And Regulatory Strategies

After the recovery of Chinese insurance industry, auto insurance has always been dominating the property insurance, as well as a significant method of risk management. In recent years, auto insurance has increasingly broadened its coverage with the progress of insurance industry, which plays an important role in traffic safety management and social stability maintenance. The standard auto insurance provisions of three versions issued by IAC have been used for nearly ten years without any revision, the ratemaking system is also strictly regulated by CIRC over the same period, all these factors leads to the market is at a low level state of disorder competition and lack of dynamic. The stringent regulation system could hinder the development of auto insurance industry to some extent. In order to solve the problems existing in the market and conform to the trend of comprehensively deepening reforms, the CIRC decided to launch an auto insurance market-oriented reform pilot from June 1,2015 in 6 regions besides Shandong province.Auto insurance market-oriented reform has always been a hot topic in academic circle in the past several years, numerous scholars conducted researches on the motivation, approaches and influence of market-oriented reform. According to the overseas reform experiences, it is obvious to draw a conclusion that market-oriented reform doesn't equal complete deregulation, reasonable regulatory strategies are indispensable after the reform on the contrary. However, there are few results concerning the regulatory strategies in Chinese market-oriented reform process in former researches. Therefore, this paper will study the regulatory strategies choice based on the analysis of challenges current regulation system may face under the background of market-oriented reform.In the first place, chapter 1 is an introduction of this paper, which briefs the background, purpose, framework, innovation and drawbacks of the research in this paper, as well as the previous studies with respect to the relevant subject.Then, the chapter 2 introduces the theoretical basis of insurance regulation and market-oriented reform, including public interest theory and government failure in regulation which derived from the Economics of Government Regulation.Chapter 3 firstly introduce the motivation and reason of auto insurance market-oriented reform in China, which points out Chinese government is supposed to implement reform to solve the outstanding problems existing in present market, meanwhile all participants of the market have adequately prepared for the reform. Then this chapter provides a review of the history of Chinese auto insurance market-oriented reform.The 4th chapter sums up overseas experience and inspiration which are worth learning by China, by analyzing the motivation, exact meihods and market reaction of auto insurance market deregulation reform in South Carolina of the United States, Japan and Korea.Chapter 5 pays emphasis to introduce actual situation of the new round of auto insurance market reform. It demonstrates the details of the reform, which includes the targets and steps of the reform and specific approaches that have been implemented. Then it comes to evaluate the effectiveness of reform pilot by qualitative analysis method.Based on the analysis in chapter 5, the chapter 6 studies the potential challenges and problem that our present insurance regulation system would face under the background of auto insurance market reform.Aiming at the challenges and problems mentioned above, chapter 7 provides quite a few suggestions about the regulatory strategies selection, including to build a solvency-centric supervision system, to improve market access and withdrawal mechanism and to allow industry association and social forces take better advantage of their strength in insurance regulation.The analysis of reform effect and potential challenges may probably be unilateral to a certain extent, due to that the reform pilot was launched in partial areas in china for no more than one year. Additionally, lack of sufficient data contribute to this paper mainly takes advantage of qualitative analysis but empirical research. So, many problems still need further exploration in the future.