The Investment And Risk Control Concerning Life Insurance Funds In China

The very most problem plaguing domestic insurance company nowadays is the investment of its insurance funds. The imperfect growth of capital market, which is incapable to provide effective alternatives for life insurance company to offset open debt risks, and the relatively narrow investment channels due to policy confinement as well, both bring upon great hidden trouble for the operation of insurance company. Thus, after carefully study the investment problem plaguing life insurance company, we will try to figure out some possible better solutions.This paper is divided into the following five parts. Firstly some initial effort will be engaged in summarize the development and investment of life insurance industry. Secondly, we will outline some unique headaches concerning the investment of life insurance funds, then later on point out a must for further expand investment channels. In the paper, we will categorize the investment problem into three as: one is the insufficient investment channels, giving rise to the second poor investment returns, and the third in our opinion is due to the bad investment mix. Further on, an international comparison with American, Britain, Japan and some other developing countries regarding life insurance investment will be introduced. Finally, concerning the selection of investment channels and risk-control we will give out some suggestion. We also compared various deputed investment options in detail including investment funds, securities and mortgage backed securities or the so-called MRS, hard assets and infrastructures. Besides, our paper also points out that the development of domestic public funds market will not only enrich the alternatives of insurance investment funds, but concurrently create even more regulating tools in macro-level as well. Risk-control in this paper will be discussed from the following two dimensions: one is inner manipulating mode adopted by insurance company, which mainly focus on risk-control tenet, that is how to maintain a balance between investment operation and insurance accept, rather than technical measures, another is from regulator's perspective. We argue that with the expansion of investment channel for insurance funds, capital abundance index of insurance industry should be established, and also how to implement will be discussed.