Research On The Mechanism Of Risk-sharing In Construction Quality Insurance System In China

It has been puzzled owner for long time that the rights can not be protected effectively when the quality problems incurred in the course of using. In order to solve the contradictions, the Ministry of Construction P.RXhina (CIN), the China Insurance Regulatory Commission (CIRC) and the People's Insurance Company of China (PICC) started up trial of the Construction Quality Insurance System (CQI) on September 19, 2006. However, the CQI has been launched for about two years, there is still not a successful insurance case in China. The unreasonable risk-sharing mechanism between the insuer and the responsible parties of project is the root cause that the CQI is in the dilemma. Therefore, how to build a reasonable risk-sharing mechanism between the insuer and the responsible parties of project is the key problem.The thesis commences risk-sharing among the insurer and each responsible entity, and sets up the model of risk-sharing with multi-period, multi-level and multi-participant on the basis of the game and principal-agent theory. The object of the study is to set up a mechanism of risk-sharing in which the risk of CQI could allocate reasonably among the each main participant, and to make improvement on the system of CQI considering the earthquake risks. Its main contents included three parts such as status analysis, theoretical research and suggestions of system improvement.From the status analysis, the thesis analyses the foreign engineering quality insurance system. On this basis, the thesis further analyses the characteristics and classification of engineering quality defects and the relations among each participant in the CQI and the advantages and disadvantages of the "Shanghai model", "Fujian model" and "Guangdong Shunde model" in China.From the theoretical research, in this thesis the risk faced by the insurer in the contracting phase is analysed and the risk-sharing incentive contract model between the insurer and the contractor is set up by the game and principal-agent theory based on the result. The conclusions show that more efficient contractors are willing to choose a higher powered incentive contract and exert higher effort at the optimum with single-stage, and the intrinsic motivation has more remarkable effect on exciting the effort level of contractor than extrinsic incentive when the contractors' intrinsic motivation is considered. Then the insurer can predict the loss distribution of next year according to the construction quality problem occurs in 1 year after the final acceptance, and can judge optimal effort level of the contractor and determine the final premium with multi-stage dynamic risk-sharing. On this basis, this thesis gives out the model of proportion of optimal reinsurance between the insurer and the reinsurer. When the existence of rent-seeking in the contractor and risk management institution, the insurer could take the prevention strategy that he incents risk management institution and eliminates the difference of the premium benefits profit between the lazy behavior and the unobserved information of the contractor. For the irregularities of insurer to carry out the CQI, this thesis puts forward the insurance supervision departments should take the optimal regulatory strategy with higher efficiency of supervision and heavier penalty. And for the fraud of insured, this thesis puts forward the insurer should take the optimal strategy with heavier penalty. In this thesis, based on the analyzing on the risks of the underwriting stage of the responsible parties of the CQI, the game model of the insurer and the responsible parties is set up. The insurer will enhance the probability and amount of recovery to promote the responsible parties to work hard.From the suggestions of system improvement, according to the problem that the CQI does not cover the loss of housing as a result of the earthquake, the thesis proposes setting up the model of comprehensive earthquake insurance of building based on the CQI from four parts as follows: the legal foundation, the risk assessment, actuarial and control system, financial risk dispersion mechanism and claim management system.