The Transformation Of Operation Modes And Innovation Of Supervision Mechanisms In China's Insurance Industry

With access to the WTO, China's separated-finance institution is stricken by the tide of cross-finance institution in the world, which causes to the thansformation of operation modes, and the problems in supervision of insurance being comparatively lagged more serious. It is vital for China in the transition period to keep harmony with the contradiction of world's cross-finance tendency and China's separated-finance situation and to construct the supervision system of insurance suitable for our country's economic situation. China's alternation of specialized insurance and cross-insurance virtually is a dynamic evolvement of specialization and pluralism of financial production, but the evolvement is an impetus to reforming the operation of insurance. The reason of why the specialized insurance and cross-insurance can be coexisted is that the market compromises the dilemma of specialized and diversified economy according to the estimation of transaction cost and transaction efficiency. Whether scope economics exist in the cross-finance in China is still a dispute in the academe. From the angle of insurance, the dissertation chooses the relevant data of 9 insurance companies and respectively makes the correlation analysis between management of cross-insurance and scope economics and financial risks. The results show that on the one hand, there is pertinence between the average scope index of the insurance company and its economic performance, and to a certain extent, the management of cross-insurance played a role in dispersing the risks. On the other hand, different insurance companies have different results in dissolving the risks. The transformation of operation in the insurance industry caused another discussion about fabricating the evaluation index for insurance's competitive capability. The Grey Theory overcomes two shortcomings in the former researches into insurance's competitive capability. One is most researches lay particular stress on the financial index or the scale index. The other is the traditional quantitative analysis on small swatch data cannot ensure the accuracy of the results. The dissertation makes scientific quantitative analysis on 5 domestic life insurance companies via the target heart analysis of the Grey Theory, the results show that the large-scale companies are not equal to the ones with more competitive capabilities. The change of save subjects and investors, the inner need of insurance companies' persisting development and the structure change of large potential of insurance market and financial needs form the three impetuses to change our country's insurance operation. However, there are kinds of unconquered institutional restrictions in the mode transformation whether in the macroscopic or in the microscopic respects. Therefore, there is a transitional period in the selection of operation because the conditions are not enough for Chinese insurance industry to adopt cross-finance. Because institutional supply and demands changed, disequilibrium presents between the operation's transformation in Chinese insurance industry and its supervision, which shows the supervision is inefficient. Because different supervision sectors have different understanding in the estimation of supervision costs and earnings, the extension of supervision of insurance in China is difficult to define, which argue the mechanism innovation of insurance supervision. Being different from form innovation, mechanism innovation is useful for advancing the validity of supervision and can dynamically adjust the imbalance between insurance supervision and transformation of operation. The theory of stimulation and regulation emphasizes solving such problems as converse selection, moral risks, inadequate competition, producing rent as well as seeking rent caused by the information dissymmetry between regulators and somebody being regulated. In order to balance efficiency and information rents, the dissertation seeks to design a stimulating framework which can not only reduce cost and improve service quality, but also prevent enterprises from abusing the rights of free choice. Based on more discussion about the price with upper limit of naturally monopolized industries, the dissertation adopts the principle of Incentive Compatible and Game Theory to analyze the stimulation system of our country's insurance supervision and find a new way to form its mechanism innovation. To set up the system of effective information disclosure is the basis of innovatingsupervision mechanism of insurance, which is also a question of stimulation. The key to induce the insurance company to tell truth is the supervision authorities should provide stimulating surroundings of financial internalization, which means the costs and earnings of financial internalization should be handled with suitable methods. The credit grading of insurance industry is not only one of important reference index for the insurance authority to have an effective supervision, but a way to reduce "the Tragedy of the Commons" in Chinese insurance credit. In the field of insurance's credit grading, USA has set a good example for us.