A Study On Solvency Regulation Of Life-Insurance Company

The solvency of life insurance companies is the core of its stable operations. Life insurance companies must have the ability to repay debts on time, in order to protect the rights and interests of policyholders, the insured persons and the beneficiaries. Therefore, to strengthen the supervision of solvency of life insurance companies is of great importance both in theoretical value and practical significance.In terms of the life insurance companies, the solvency is a comprehensive reflection of its business. The solvency of life insurance companies depends largely on the situation of the company's assets and liabilities, profitability, scale of business development, as well as the size and the status of funds operation. The internal and external factors of life insurance companies' operation will both affect the solvency. The external factors include changes in population growth patterns, interest rate volatility, changes in price levels, as well as changes in capital markets; Internal factors include the quality of underwriting, investment income, the level of expenses, and the company's capacity and control of the underwriting, etc. The different factors interact and influence between each others, and have combined effects on the formation of solvency in the life insurance company.China's domestic insurance business only started in 1979. The life insurance business started late but developed fast, and the market is still far from normative. On one hand, the regulatory system is not yet wholly set up; on the other hand, the insurance companies' internal control system is incomplete, mainly displayed in that accounting system and financial reporting system is not complete, the actuarial basis is weak, the inadequacies of the regulation roles and supervision skills in early warning indicators, as well as the ignorance of supervision of the match of regulatory assets and liabilities in life insurance companies. Facing this generally situation of insufficient in solvency in China, to strengthen the solvency supervision has become an urgent task of regulatory authorities. Against such a background, this paper analyzed the life insurance companies' solvency of the current regulatory theories as well as related research results as a basis, using the method of comparative study and the method of literature data study, compared the international life insurance companies' similarities and differences of regulatory models in solvency , pointed out the characters and inadequacies in China's current models, proposed some new ideas to reform the solvency of the current regulatory approaches and models of China's Life Insurance Companies.This article is divided into six chapters. The first chapter started from the current status of solvency in China's life insurance companies, described the importance of solvency supervision, as well as introduced the solvency regulation research results; The second chapter explained the theoretical basis for the solvency, discussed the internal and external factors which impacted the solvency of life insurance companies; The third chapter explained the solvency supervision models of European Union, the United States, Japan in detail, and the notices for solvency of China's life insurance industry regulations; The fourth chapter explained the practice of China's regulation of solvency and the exiting problems; The fifth chapter proposed suggestions for improve China's solvency regulation regime, including to establish of independent regulation of the accounting system, to establish and complete the system of professional actuaries, to establish the dynamic solvency testing system, to put focus on matching assets and liabilities, as well as to establish the credit rating system in life insurance companies.