Suggestions Of The D&O Insurance System In China

D&O Liability Insurance, short for the "Company directors and officers liability insurance, is a subject matter insurance system in which a director or manager bears civil liability of the insurance for the company or a third party (shareholders, creditors, etc.). Under such a system the company's directors and officers liability risks are partly borne by insurance companies Insurance companies according to the insurance contract undertake the economic liability of directors and senior staff caused by their errors.In developed countries of Europe and the United States, the vast majority of listed companies bought it for their directors and senior management personnel.Its rapid evolution indicates its necessity. Theory of the United States corporate law holds that the liability insurance system protects innocent directors and officers from undue criticism and has encouraged those who have the ability to accept the directors and senior staff positions, and prevents malicious frivolous shareholder lawsuits.Under the trend of economic globalization, China's economy has integrated into the tide of the world economy. As China's Government intensifies the improvement of the corporate governance structure, more and more directors of listed companies are punished by the China Securities Regulatory Commission for illegal deeds. More and more directors become increasingly aware of their risk, are scrambling to find ways to circumvent. And as the economic development, more and more companies seek greater development overseas, in order to enable these companies to get a place in global competition, a perfect director liability insurance must be established to alleviate the worries of the directors and senior management staff, so that they can be secure enough to tap their potential.Since January 23,2002 when Ping An Insurance Company issued to China Vanke Co., Ltd. the first Directors and Officers Liability insurance policy eight years ago, the director liability insurance system had a little development, but the prospect remains bleak. In the system, at this stage the legal system of director liability insurance is not perfect, even in the very few provisions of directors' liability insurance system, the content is not specific enough, and the legislative level is relatively low, there is no basic legal requirement on the fundamental level. In practice, with the deepening of discussion within the society and understanding of the system by the company's management and with the introduction of laws to strengthen the legal liability of directors and senior staff, one after another company purchases the liability insurance, but the Directors and Officers Liability Insurance Market is still developing slowly. This is partly attributed to our lack of theory and practice of Directors and Officers Liability Insurance, which worth our consideration.In the establishment of our Directors and Officers Liability insurance system, we should base on our existing legislation as much as possible to improve the system of directors liability insurance-related legislation, consider China's reality, learn, absorb, and transplant foreign legislative achievements and practical experience in order to establish a liability of directors which is in line with China's national conditions, which has extremely important significance not only for the present development of China's economy and the insurance industry but also for the economic, social and long-term development and improvement of the legal system,...