Legal Study On China's System Of Insurance Regulation

The limits of law and the failure of regulation bring about the limit of insurance regulation. The evolution of the governance on insurance regulation and the institutional change in insurance regulation reveal the fact that the effective control of the risk in insurance business and its healthy development have as their foundation the construction of effective system of insurance regulation. Effective system of insurance regulation is a multi-layered and all-around institutional arrangement comprising insurance regulation, governance of insurance companies, self-regulation of the insurance calling and social regulation of insurance. The effective system of insurance regulation is a system with dual cores: first, effective system of insurance regulation is centered on the regulation of insurance and is aimed at the realization of the regulation goals; second, it is largely focused on the regulation of solvency capacity. Insurance regulation is a means to an end, rather than the end per se. In the process of the development of insurance business, the effective system of insurance regulation will have to improve itself to better control the risks involved. This is the basic viewpoint of this paper.The effective control of the running risks in insurance business is a bottleneck for the development of the insurance business and it is at the same time the major task of insurance regulation. Insurance business is mainly a business about risk and it is at the same time confronted with risks. According to the division of its business, the risk it faces includes that of accepting insurance and the application of the insurance fund. This paper starts from the risk analysis of insurance fund and it follows a major direction of the effective control of risks. An investigation of the institutional change in insurance regulation helps construct the framework of effective insurance regulation and analyze in a detailed fashion the institutional content of the system of insurance regulation and the mechanisms of its realization. Finally, with as the model the system of insurance regulation, efforts have been made in this paper to dwell on the institutional function of the system of insurance regulation, particularly in the risk control of the application of the insurance fund. This fully shows the effectiveness of the system of insurance regulation.It deserves special explanation that efforts have been made in this paper to study on the effective system of insurance regulation from a legal perspective and the concrete conclusions in this paper are explained in the form of legal rules rather than proved in any other form. This is a research method employed in this paper. When it comes to the risk analysis of the application of the insurance fund, the institutional evolution in insurance regulation and the recognized criteria of solvency, basic theories in the fields of management science, institutional economics and actuarial science have been used. As to the analysis of concrete mark index, the target value of the system of insurance regulation and the function of cost-effectiveness of governmental regulation, they are not explained form the angle of economics and rather, their relevant conclusions have been employed as the natural premise of this paper. My analyses of the self-regulation of insurance calling, governance of insurance companies and the social regulation of insurance are somewhat partial and attention has been directed mainly to their function of regulation rather than all of their functions.This paper endeavors to explain the framework and specific content of effective system of insurance regulation with risk as the center of my concern. The regulations I have talked about in this paper boil down to the control of risks. This paper consists of four sections which can be further divided into eight chapters.Section one is also chapter one. It centers on the problems to solve in insurance regulation through analysis of the risks in the application of insurance fund. The application of the insurance fund is a major source of the income of insurance companies and therefore a major pillar for the development of insurance business. It is not only applicable, but also necessary for us to effectively use insurance fund to develop insurance business. However, the application of insurance fund changes the running mode of insurance business, while at the same time, it brings with is considerable risk. This makes it a must for us to reevaluate risk in insurance regulation. The new development of modern insurance brings new challenges for insurance regulation, hence the necessity for innovation in insurance regulation.Section two consists of chapter two and chapter three. It is mainly about the innovation of insurance regulation, which includes not only that of the conception of insurance regulation, but also that of the rule and system of insurance regulation. Chapter two dwells on the evolution of the categories of insurance regulation, which shows that the reasons and ways of insurance regulation now are not as important as the governance of insurance regulation. We argue that the innovation in legal rules concerning insurance regulation is a manifestation of that of the conception of insurance regulation. Chapter three focuses on the institutional change of insurance regulation and efforts have been made to show that effective insurance regulation is regulation over the solvency of relevant parties. The 2008 crisis reveals the limits of insurance regulation per se and insurance regulation should always be accompanied by the governance of insurance companies, self-regulation of insurance calling and social regulation of insurance business. These two chapters together make clear the basic framework of the system of effective insurance regulation. The effective system of insurance regulation is a combination of insurance regulation, governance of insurance companies, self-regulation of insurance calling and social regulation of insurance business.Section three comprises chapter four, five, six and seven. It is mainly about detailed analysis of the system of insurance regulation. Chapter four makes clear that effective insurance regulation is moderate regulation. It centers on solvency capacity and has diversified means for regulation. Is has obvious layers. Moderate regulation aims at the solution of the boundary problem of regulation and it is the precondition for the validity of insurance regulation. Moderate regulation has clearly set regulation goal and the regulation subject is well qualified for his or her job. Chapter five, six and seven elaborate the means for the realization of insurance regulation from the perspective of governance of insurance companies, self-regulation of insurance calling and social regulation of insurance business. It is pointed out that, with concrete institutional measures, the regulation of insurance business can be better realized via governance of insurance companies, self-regulation of insurance calling and social regulation of insurance business. It can in turn specify the boundary of insurance regulation and realize the goal of regulation on solvency capacity.Section four comprises chapter eight. Positivist measures have been introduced in the verification of the validity of regulation measures for the application of insurance fund. Here what matters most is the legal rules concerning the application of insurance fund. Considerable attention has been directed to the legal rules concerning the application of insurance fund. Special attention has also been directed to the specific value of governance of insurance companies, self-regulation of insurance associations and social regulation in the control of risks involved in the application of insurance fund.The elaboration on the system of insurance regulation is aimed at the claim that insurance regulation should have specific objective and clear-cut boundary. Insurance regulation should not put everything into its package and it is not omnipotent. Under the system of insurance regulation, other rules of insurance regulation can better fulfill their functions. Insurance regulation should leave enough space for the governance of insurance companies, self-regulation of insurance calling and social regulation of insurance business. It is a precondition not only for innovation in insurance regulation, but also for insurance innovation per se. This can ensure that the departments in charge of insurance regulation can concentrate on regulation as their core task, they can also improve the efficiency of their regulation. Accordingly, relevant legal rules concerning insurance regulation should also be optimized in the same spirit. The regulation over solvency capacity should be enhanced, while regulation over other aspects should be lessened to a certain extent to provide a better legal environment for the development of insurance business.