Investment Risk Control Of Domestic Life Insurance Industry

With the trend of innovation and deregulation of the multi-dimensional international insurance market, the risks facing the life insurance industry are more complex and the operation of the industry is faced with more austere tribulations. Quite a few life insurance companies have gone bankruptcy in recent years. With the establishment of the market economy system, the domestic life insurance industry has developed quickly and made great progress, becoming an important part of national economy. As the significant supplement of the social security system, the operation of the life insurance industry has effect on the interests of thousands of families, playing an important role in maintaining social stability. The transnormal development of domestic life insurance industry in recent years, together with the continual downward adjustments of banking interest and the constraints of investment tunnels, lead to the emergence of the solvency risk of the industry.Experiences of countries with mature life insurance industry show that life insurance companies are among the most significant participants of the capital markets, and the latter has been an important source of profit for the former. Compared with the developed countries, domestic life insurance industry and the capital market are both in the infancy. But with the steady growth of the financial market, the investment and finance functions of the life insurance industry will become clearer, and investment profits will be the main brace for the industry to compensate the loss and improve solvency ability. The domestic life insurance funds have entered the security market, leading to a sharp increase of the investment risks of the industry. Consequently, it's necessary to strengthen the investment risk control of life insurance from the macro supervision and micro management, and to build and perfect the investment risk management system, in order to improve the investment revenue and solvency ability of the life insurance industry.The paper is aimed at discussing the dual supervision and control of investment risk of life insurance, composed of four parts. The first part is a brief introduction of investment of life insurance companies, including the main features and functions of life insurance, the importance of investment, the principles to be complied to, and the available investment choices. The second part makes a comparison and analysis of international life insurance investment supervision and the investment practice, in order to find the usefulness for reference. The third part tries to find the deficiencies of domestic supervision of life insurance investment and the risks involved in the investment activities. The fourth part comes up with the perfection advices of effective control of investment risks of life insurance, embracing the perfection of macro supervision, the development of domestic financial market, the establishment of the investment risk management system of the life insurance industry and the execution of effective asset and liability management.