Research On Catastrophe Insurance Legal System In China

In the nearly half century development of prevent disaster prevention and control system,catastrophe insurance has become one of the most important institutional arrangements incatastrophe risk management. Catastrophe risk is different from general insurance risk, thecharacters of catastrophe such as the low frequency, high loss, disaster occurred at the sametime but the affected area is widely makes the catastrophe insurance at the beginning shouldface the hard problem of catastrophe insurance market failure or government failure. Thispaper from the angle of perfecting legal system, to carding and construction the legalproblems of catastrophe insurance, to do one’s little bit to help for the construction ofcatastrophe insurance legal system in our countryIn the first chapter "Introduction”，it introduces the connotation of the catastrophe andsocial demand for building the catastrophe insurance legal system, and reviewed thecatastrophe insurance in the literature at home and abroad. In the definition of catastropheinsurance, different countries have different ways to define. Some countries define it accord tothe loss amount, some countries are defined according to the natural factors and humanfactors. Combining with the reality of the situation in our country, this paper deems thatcatastrophe insurance should only point to the catastrophe risks that caused by naturaldisasters. Catastrophe insurance refers to risk guarantee system that caused by sudden and hasa great harm of natural disasters caused by the property loss and casualty. Catastropheinsurance has three obvious features: it can take market-oriented operation, social securitypurpose and policy orientation of policy insurance. In catastrophe insurance legal system ofsocial demand section, this paper discusses the social reality that natural disasters happensfrequently put forward urgent requirement to the establishment of the catastrophe insurancelegal system; to deal with the huge natural disaster’s system requirements and policy guidance,our government has issued a series of disaster relief policy, but nowadays, the policies ofcatastrophe insurance is aims to show the leading role of government rather than make betterincentives to attract commercial insurance companies and other market forces to participate inthe catastrophe insurance system’s construction, it has not set up transform systemspecification of catastrophe insurance that mainly aims at catastrophe insurance which leads to the absence of catastrophe insurance legal system.In the second chapter"Operational mode of catastrophe insurance ",it introduces theinternational experience of catastrophe insurance operational mode, compares the differentcatastrophe insurance business model, and summarizes the consideration factors about themode selection of the operation of catastrophe insurance. The main international experienceof catastrophe insurance business model include government leading supply of catastropheinsurance, the market leading supply of catastrophe insurance, and public and privatecollaboration management of catastrophe insurance. The advantage of government suppliesthe catastrophe insurance is cost advantage, fairness, effectiveness and standardization; theinsufficient of which include it lead to the large financial pressure if supply is led bygovernment, security level is also insufficient, secondly, the government does not have theprofessional advantages of commercial insurance company. Thirdly, the capital which isdominated by the government for the construction of catastrophe insurance, generallytransferred to each region by means of fiscal transfer payment, it would cause the regionalinequality of catastrophe insurance due to the transfer power between regions is unbalance.Compared with the government, the market provides catastrophe insurance has the followingthree advantages: strong flexibility, high professionalism and contribute to the market mainbodies’ rational decision-making; Disadvantages are:"high risk and low profit" of catastropheinsurance business its not attractive, the commercial insurance company is not willing to dobusiness of catastrophe insurance. The catastrophe insurance cooperation mode has obviousadvantages: on the one hand, it can effective mobilize premium rate making and handlingclaims quickly, on the other hand, it can utilize the advantage of government funds and policy,and when it is necessary, it can rely on the power of the law and policy promoted fullimplementation of catastrophe insurance which enables the catastrophe insurance to seekbalance when it can ensure market efficiency and social equity. Catastrophe insurancecooperation pattern has the disadvantage: government and insurance company havecooperation consensus, they are also conflicted by interest, and the relationship between themis in the middle of cooperation and independent, therefore, the cooperation of the two needslarge amount of “communication cost”. The catastrophe insurance operation mode of acountry is determined by y the degree of dispersibility of the catastrophe risk, it is a problemwhich has the obvious localization feature and regional feature, for the operational mode ofcatastrophe insurance, it only has most appropriate mode and does not exist an optimal mode. Finally it introduces the new direction of the catastrophe insurance business model: pooling ofrisk.In the third chapter"The designing of catastrophe insurance product",it introduces thedesigning of the insurance kinds of catastrophe insurance, the determination of insurancecoverage, the premium and the identification of insurance accident. This paper argues that thedesigning of catastrophe insurance should not adopt the designing mode of generalcommercial insurance kinds, it should carry out the classification the design in accordancewith the types of natural disasters such as earthquake risk, flood risks, typhoon risk, droughtrisk and so on. Secondly is the guarantee range of catastrophe insurance product which mainlydiscussed the issues of catastrophe insurance product insurance mark and insurance liability.The third is insurance rate setting of catastrophe insurance products, this paper argues that itshould comprehensively considers the disaster areas, the disaster frequency, hazardous andthe change of the market to set a variable correlation mechanism and implement account rates.The fourth is the definition catastrophe insurance accident. This paper deems for catastropheinsurance accident defined should adopt the model of "accident cause and accident result."The fourth chapter is"Sales of catastrophe insurance and claims". For catastropheinsurance sales, the main international sales ways are mandatory, completely voluntary andhalf mandatory three sales ways. Combined with the current specific situation and the relatedinternational experience, this paper deems in our country it should adopt weaker mandatory orhalf mandatory sales ways, when it develops to a certain level, it can gradually build completeresources sales way. For the catastrophe insurance claims, this paper argues in order to showsthe nonprofit and for-profit, in the claims it should take the way which cares both ofefficiency and fairness, to seek a reasonable balance between them.The fifth chapter is"Support mechanisms of catastrophe insurance policy". Catastropheinsurance market failure, it is difficult to overcome through the self-market operation, it needsgovernment to be an outside force to intervene it limited. Catastrophe insurance has a strongsocial demand, it needs the government to provide powerful funding and system support;Dominated by the government participation and the construction of catastrophe insurancesystem is an optimal approach to risk management. Therefore, in the construction ofcatastrophe insurance system, the government’s policy support of catastrophe insurancemainly embodied in three aspects: one is to establish catastrophe insurance fund, to providestrong capital backing for catastrophe insurance; the second is to build reinsurance system to catastrophe insurance system, simply bear the catastrophe risk by the government andcommercial insurance companies is difficult to achieve better risk disperse and transfer, andthe establishment of the reinsurance system enlarge the main body of bearing and dispersingof the catastrophe risk. It can have a certain degree of risk dispersion effect; the third is toestablish a comprehensive catastrophe insurance compensation mechanism, mainly includingthe government, commercial insurance companies, market, society and other diversifiedpower of compensation of supplying.In the sixth chapter"The suggestions of perfecting our country’s catastrophe insurancelegal system.",it put forward perfect proposal to our country’s legislative principle, legislativemodel, and the management mode of catastrophe insurance, product design, sales, claims,catastrophe insurance policy support mechanisms, etc. Firstly, the principle of catastropheinsurance legislation should insist on the principle of government-led, market operation, andcombines the principle of sociality and commerciality. Secondly, our country should adoptscattered combined with unified legislative mode, it not only needs to establish a specialcatastrophe insurance legal system, bur also should regulate and perfect other relevant laws.Thirdly, the management of catastrophe insurance system in China should take thegovernment as the leading, commercial insurance companies, market power, and theparticipation of social forces participate together, take the market management mode andoperation ways, to establish perfect catastrophe insurance funds and catastrophe reinsurancemechanism to expand the capital source channel and catastrophe insurance risk dispersionarea. For the fourth, the catastrophe insurance product design should fully consider thecatastrophe insurance products have dependent features to natural disasters, to set up theproducts according to the classification of different kinds of natural disasters. For the fifth,catastrophe insurance sales should be taken by half a mandatory way to transform into thevoluntary sales way step by step; Catastrophe insurance claims should take into account thecharacteristics of commonweal and commercial coexistence of catastrophe insurance, takedegree of fairness and efficiency analysis method to carry on the reasonable configuration.The sixth is the supporting of catastrophe insurance policy to be perfect.