Study On Insurance Rate Liberalization In China

From the international side, the world economic situation is not optimistic, and is still in the deep adjustment, since the US subprime mortgage crisis led to the global financial crisis in 2008. The United Nations, the World Bank and other international organizations cut its economic expectation respectively. From the domestic side, on the one hand, China’s economy has shown signs of slowing down, and the rate of economic growth is still in decline in recent years, by the impact of the financial crisis and the overall economic situation in the world. In March 2015, the government work report continued to lower down the GDP growth target of 2015. The economic downward pressure is very large. On the other hand, China’s economy has obtained great achievement since the third plenary session of the eleventh central committee established the basic policy of reform and opening-up in 1978. The third plenary session of the fourteenth central committee established the socialist market economy system and started the market reform. China also took a series of reform measures, like the joint-stock reform, the reform of exchange rate system, the interest rate liberalization reform, and promoted the development of the economy. But the reform has left a lot of problems due to the limit of system and social situation, such as the environmental pollution, the enlarging gap between poor and rich etc.. These problems have affected the social stability, which need to be solved urgently. In view of this, the third plenary session of the eighteenth central committee in the year 2013 puts forward to "deepen the reform comprehensively", "let the market play a decisive role in the allocation of resources". For the insurance industry, the rapid growth,which is caused by the demographic dividend, economic growth and the high marginal growth in the early stage,disappears gradually. The insurance industry is an important field in reform deepening, and how to do the reform to improve insurance service quality and develop healthily and thus to contribute to the economic development of our country becomes a common concern of the circles of theory and practice. China has been implementing a highly regulated insurance premium pricing measures, since the recovery of insurance in the year 1979. Although rate regulation ensures market stability to some extent, it lowers the efficiency of market, and is not good for the long term development of insurance. Therefore, the insurance premium rate liberalization is an important measure for the reform of the insurance industry, and also is the key of China’s market economy reform. Additionally, China’s insurance premium rate market started late, and many problems have not been solved. Based on the above background, this article researches the insurance premium rate liberalization and analyses its basic theory and influences, so as to provide reference to the rapid premium rate liberalization reform.This article analyses rate liberalization from the theory basic, implement qualification, impact and the development process and the experience at domestic and abroad in two ways. In this paper, the research content is divided into the following sections:The first part is the introduction. First of all, it gives the background of this article in three aspects:the world economic situation is not optimistic, the accelerating domestic reform and the insurance industry deepens the reform. Secondly, it expounds the significance of this study:the practical reference value to the premium rate market reform, the enrichment of the research on the rate liberalization. Thirdly, it summaries the research present situation of the domestic and foreign on the rate liberalization and this is the main source of the theory. Lastly, it introduces the research methods, research framework and expounds the innovation point of this article.The second part is the theory and some related problems. Firstly, it gives the definition of a key concept-rate liberalization. We think rate liberalization is a dynamic process of gradual reform and it aims to achieve the rate liberalization determined by the market supply and demand, its core is to deal with the relation between the government and market well and straighten out the logical boundary between regulatory and market determined rates. Secondly, it introduces the related theories of rate regulation, which compromises of the explanation of rate regulation, the way of supervision and the question of rate regulation theory.. Thirdly, the function and meaning of insurance rate liberalization is explained. Finally, the interconnectedness between interest rate liberalization and insurance rate liberalization is also analyzed. This part is the theory basic of the article.The third part is the process and revelation of rate liberalization in various countries. Through document search and collation, it elaborates the process and experience of rate regulation and rate liberalization in the US, the UK and Japan in detail, especially introduces the auto insurance rate liberalization in the above three countries. Finally, it summarizes revelation for China’s rate liberalization through comparative analysis.The fourth part is the implementation condition and foundation of rate liberalization. This part also analyses the independent pricing power, solvency restriction mechanism and supervision of insurance products of insurance in developed countries. Through the comparative analysis of the rate liberalization reform in developed countries, we think the strong pricing power, perfect solvency restriction mechanism, mature product regulation mechanism, a sound market risk prevention system and a perfect insurance market systemare the basic and conditions for the implementation of the rate liberalization. China has basically achieved the conditions for rate liberalization, from the current construction of our country of systems, which will steadily push forward the rate liberalization.The fifth part is the process of China’s insurance rate regulation and liberalization.This part researches the history and present situation of rate regulation based on the domestic market, and analyses the process of rate liberalization from solvency regulation reform and product regulation reform. This part is specific analysis of rate liberalization and is the basis for the policy of rate liberalization reform. Currently, rate liberalization is not very high, and there are several problems in regulation, like the singleness of regulation mode and the imperfect regulation mechanism. Therefore, rate liberalization should realize the synchronization of the promotion enterprise independent pricing power, the improvement of market access and exit mechanism and a sound regulation system.The sixth part is the situation analysis and judgment of the premium rate market reform in China. First of all, the premium rate marketalization is an important part of financial market, is the inevitable choice of interest rate marketalization, asset management era, at the same time, the premium rate market and financial marketalization, this paper expounds the Internet interactions. Rate marketalization, downward pressure on interest rate and market uncertainty inevitably brought about enterprise risk management and insurance supervision system design, regulatory model, regulatory improvement put forward higher requirements.The seventh part ispolicy suggestions for China’s rate liberalization reform. Based on the above research, combining with the experience and lessons at home and abroad, from the change of insurance products pricing regulation mode, strengthen the basic research, the solvency of the capital constraint mechanism, improve the market exit mechanism, premium rate making institutions to establish, improve the level of big data applications put forward specific Suggestions on the premium rate market reform deepening.The eighth part is the conclusion and research prospect. It summarizes this article’s conclusion and the deficiencies of current research and puts forward the direction of future research is research on insurance actuary pricing and quantitative research on market rates.For research innovation, this article attempts to contribute in the following three ways: (1) redefine the concept of rate liberalization combing with the existing research and the background of China’s market reform; (2) analyze the relation among rate liberalization and market economic reform, "the era of big asset management", interests liberalization and Internet Finance, in order to provide new research ideas for follow-up studies; 3. We did system research on rate liberalization related questions and enrich the research content.