The Research On Legislation For The Securitization Of China's Catastrophe Insurance Risk

The securitization of catastrophe insurance risk is on the basis of asset securitization, but it is more complex and advanced than asset securitization.The securitization of catastrophe insurance risk that can transfer insurance risk to the capital market by issuing financial securities is a technique of asset securitization. The first element is the financial engineering that the cash flow will be "packaged" or dismantled, and finally converted into catastrophe risk securitization. The second element is the capital market that is the final catastrophic risk transactions recipients. Form the law, the assets of the catastrophe insurance risk securitization is essentially a claim. In essence, catastrophe insurance risk securitization is a way of structured finance, whose core is to establish a rigorous and effective framework for the transaction, and the framework of this complex transaction must play a decisive role in the process of the catastrophe insurance risk securitization.Compared to reinsurance and other financing methods,catastrophe insurance risk securitization has its unique characteristics and advantages. However,because of the lack of legal systems of the our catastrophe insurance risk securitization ,the imperfect capital markets , the unsound financial system, coupled with its own particularity of catastrophic insurance risk securitization, the securitization of catastrophe insurance system has many practical problems and legal obstacles. To cope with the risks, we must do more research about asset securitization. We must learn from foreign experience and lessons in order to build China's catastrophe insurance risk securitization legal system.In the legal system,we must let legal nature of the asset securitization clear, make the legal standards of real sales sure and make the legal status of the SPV clear.Our asset securitization legislation should focus on the three following questions. First, the provisions of the building of the SPV must be in the law,involving the organizational forms, business scope, operating principle and building a mechanism for non-bankruptcy. Second, the law must make the real sales clear. The scope of assets, securities and asset transfers and the criteria of real sale should be involved in the law. Third, The securitization of catastrophe insurance risk must be supervised and managed. And we must make the status of regulatory bodies, the responsibilities, powers, duties, scope, procedures for monitoring measures clear.