The Establishment Of China's Earthquake Insurance System

The destructive force of the earthquake is amazing with tragic consequences. It is very difficult to restore the normal life and production of the disaster area. Looking at countries'developing practice around the world, there are mainly four kinds of compensation method, government compensation, commercial insurance compensation, social donations and self-compensation for the earthquake loss. As a means of financial reserves and economic compensation, the function and efficiency of the earthquake insurance can not be ignored. Developing the earthquake insurance is an effective way to carry out mutual aid society, to alleviate the fiscal burden, to improve the capacity of earthquake relief, and to stabilize society. Many countries, such as the United States, Japan, Mexico, New Zealand and Australia have carried out the business of the earthquake insurance. In particular, Japan and the United States developed it very early. With the cumulative earthquake experience, their laws and regulations are generally improving; their business operators become also gradually mature.Our country lies in the circum-Pacific earthquake zones so that there is the widely distributed strong damage earthquake with serious disaster losses. Since the founding of the People's Republic, the direct economic losses have been more than 60 billion Yuan which caused by the earthquake disaster. However the China's earthquake risk management system comes into being under the planned economic system. The after-earthquake reconstruction basically depends on government subsidies and social donations, which mainly solves public facilities and housing reconstruction. The general public and businesses bow to the inevitable the economic losses caused by the earthquake. In 2008 Wenchuan's earthquake further highlighted the lack of earthquake disasters'compensation mechanisms in order to leave the problem of after-disaster reconstruction at the very start. The earthquake insurance system in China lags far behind the needs of socio-economic development; especially the large earthquake further highlighted the sense of urgency for the earthquake insurance system.By drawing lessons from foreign earthquake insurance system, combined with China's national conditions, the guiding principles and concrete measures must be simultaneously for setting up China's earthquake insurance system. Its guiding principles contains: the government moderately participating and leading; combination of the mandatory and voluntary principles; fully mobilizing the initiative of the parties and implementing the multi-layered risk-sharing principle. Its concrete measures contains: improving the related laws and regulations; setting up a special earthquake insurance fund; establishing a scientific system of earthquake risk assessment and risk diversification; increasing the public awareness of earthquake insurance.