Study On The Reform Of China’s Insurance Markt Conduct Regulation

Since the1980s, China’s insurance industry has experienced a course fromrecovery to sustainable development and the expansion of the domestic business. Inthis course, the regulatory departments and administration has continuously perfectedthe insurance industry. The regulatory departments have gradually formed the“ThreePillars” framework of insurance regulatory system, which includes the supervision ofsolvency, corporate governance, and market conduct. Among the “Three Pillars”framework, market conduct supervision has become one of the main contents ofinsurance regulation, which plays an important role in maintaining the order of theinsurance market, protecting consumer interests, and promoting healthy developmentof the industry. Since2008, The various countries have fully learned from theinternational financial crisis, and have worked on promoting financial regulatoryreforms as well as increasing consumer protection. Chinese insurance supervisionwill also take protecting consumer interests as the fundamental goal and releasenumerous reform measures. Especially since the Third Plenary Session of the18thCPC Central Committee, the insurance industry has implemented the strategicdisposition of comprehensively deepening reforms, accelerated the pace ofmarket-oriented reforms, and modernized regulatory capacity and regulatory systems.In this context, how to reform the supervision of insurance market conduct, which isclosely linked with the protection of the interests of consumers and market reform,has become an important subject that requires thorough research. Thoroughlyanalyzing insurance market conduct regulation; systematically planning anddesigning the market conduct regulatory system; proposing reform objectives, ideas,and measures; understanding insurance regulatory rules all has positive theoreticaland practical significance in guiding the reform of China’s insurance regulation. This text consists of7chapters. The main contents of each chapter are asfollows.Chapter One introduces research background, object, meaning, purpose, ideas,methods, contents, and the innovation as well as the insufficiency of this paper.Chapter Two reviews the relevant research and the supervision on insurancemarket conduct. The overseas researchers have already conducted plentiful studies onthe supervision of insurance clause rate, protection of insurance consumers, system ofregulatory organizations, anti insurance fraud, and other areas of insurance marketconduct regulations. Since2000, studies on insurance market conduct supervision andrelated topic of domestic insurance market conduct supervision have increasedsignificantly. The studies include many aspects of the legal regulation of insurancecontract, insurance rate regulation, and protection of the legitimate rights andconsumer interests. From the overall perspective, these studies typically involve onlya single perspective of the supervision of market conducts, which lack thecomprehensive study of supervision on different fields of market conduct.Chapter Three, from the institutional change and regulatory practice angle,reviews the historical changes of China’s supervision on insurance market conduct. Itsummarizes China’s insurance market conduct supervision’s contents and methods,and analyses the necessity of reforming the supervision of China’s insurance marketconduct. China’s supervision on insurance market conduct has experienced the fivestages including building regulatory systems, constructing the overall framework,forming basic regulatory systems, emphasizing competitive conduct, and protectingcompetition and consumer interests. After the establishment of China InsuranceRegulatory Commission and about10years of exploration and practice, theconnotation and extension of China’s insurance market supervision have become clear.The insurance market conduct supervision includes the protection of the legitimaterights and interests of insurance consumers and standardizing the insurance market order. In the new era of time, promoting market conduct regulation reform is theurgent need for thoroughly implementing the deployment of China’s comprehensivereform strategy, perfecting the socialist market economy, and accelerating themodernization of insurance regulation. Only seize the opportunity to promote thereform of the supervision of insurance market conduct, can we effectively improvethe ability to prevent risks, protect the legitimate rights and interests of insuranceconsumers, and achieve the overall goal of insurance regulation.Chapter Four proposes the overall goal of the reform of China’s insurancemarket conduct regulation and the principles and analysis of the main content andapproach of that reform. The overall goal of regulatory reform of insurance marketconduct in China is to improve the level of legislation of insurance market conductsupervision, establish the market long-term prestige mechanism, enhance theefficiency of market conduct supervision, and strengthen the supervision’seffectiveness. In advance of the regulatory reform of insurance market conduct,regulatory organizations should adhere to the principles of combining lawfulpromotion and innovation, overall planning and step-by-step process, deregulationand strict supervision, and centralization and adjusting measures to local conditions.The main contents and keys for regulatory reform of insurance market conduct inChina is to establish and perfect the supervision system of laws and regulations, andprotect the mechanism of legitimate rights and interests of consumers and theinformation disclosure mechanism.Chapter Five conducts the overall planning and design of China’s insurancemarket conduct supervision system. The basic objective of insurance market conductsupervision is the dual targets of protecting the legitimate rights and interests ofconsumers and maintaining market order. Supervision of China’s insurance marketconduct is in accordance with the law for the people, and it should be the focus ofpublic justice, pragmatism and efficiency, integrated governance, and risk-oriented principles. The core content of insurance market conduct supervision includesinsurance product rate regulation, sales market conduct supervision, insurance servicesupervision, insurance intermediary agencies’ conduct supervision, and insurancefraud regulation; market conduct supervision methods and tools includes on-siteinspections, off-site supervision, market irregularities processing, informationdisclosure, regulatory transparency, petition and complaint handling, etc.Chapter Six concludes emphases and countermeasures of China’s regulatoryreform of insurance market conduct. The first step is to promote reform of themarket’s product rate, gradually liberalize interest rate pricing, perfect themanagement mechanism of insurance products, promote the popularization andfacilitation of policies, and stimulate market innovation. Secondly, the reform willpromote market compliance supervision mechanism, establish and perfect themanagement rules and supervision system, establish supervision mechanism forunfair competition, perfect the supervision mechanism for market conductcompliance, and promote innovation for supervision and inspection tools. Thirdly, wewill promote regulatory reform of service of insurance and the insurance servicestandardization construction, establish and perfect the insurance service evaluationand information disclosure system, and perfect the insurance service supervision andcomplaint-handling mechanism. Last but not at least, we will advance the reform ofthe supervision organization and operation mechanism of market conduct, clarifyingthe internal relationship between insurance supervision responsibilities and clarifysupervision and industry self-discipline, strengthen the function of the InsuranceAssociation, meanwhile strengthen the construction of supervision teams, increase thepower of market conduct supervision, optimize team structure, and perfect the systemfor training regulatory personnel.The seventh chapter includes conclusion and suggestion. It summarized the mainconclusions, and makes insurance supervision policy recommendations: pays greatattention to insurance market conduct supervision; clearly defines supervision for insurance market conducts; clarifies objectives of insurance market conductsupervision; establishes regulatory reform of policy-oriented insurance marketconduct; promotes the insurance market conduct supervision reform; and establishesand perfects the insurance market conduct supervision system.The possible innovations of this paper are as follows. First, it studies China’sinsurance market conduct supervision system as a whole and analyzes the necessity ofthe pressing concerns and reforms of the supervision of the insurance market conduct.Second, it designs the overall supervision system for the Chinese insurance market,putting forward goals, core content, and tools system for China’s insurance marketsupervision. Third, it proposes the goals, principles and ideas for the supervisionreform of the Chinese insurance market conduct. It also determines four key areas ofreform, which includes the marketization of the product’s rate, regulatory compliance,insurance service supervision, regulatory organizations and operation mechanism, andputs forward the corresponding reform measures.