Feasibility Study On Captive Insurance In China

A competitive insurance market has taken primary shape with large mount of Chinese insurance and foreign insurance company since we restarted the domestic insurance business. However, the fast development of the insurance industry is hampered by the single form of insurance organization, similar structure of insurance type, etc which lead to the difficulties for enterprises to find suitable cover for their risks. Contract to the traditional insrance market, captives have five advantegies: increasing the flexibilty of convering insurance, reducing the cost of insurance,; centralization of management, increasing company's cash flow and decrease tax. As a new country to the captive world, we are eager for captives developed in China.On the basis of comprehensively and systematically theoretical analysis of the defination,developing environment,characteristics and advantages of captive company, this paper inspects the practices of foreign captive company's development, and in conjunction with the actuality of development of China's insurance industry, analyzes the necessity and feasibility of the development of captive company in China. As some strategies to develop captives in China, we suggest to encourage qualified enterprises to start their offshore captive first. At the same time, in order to faster the development of captive market, we should first amend relatvie clause of the insurance law, give policy support, make clear the mode of supervision and operating rules and actively cultivate the enviorment of captive market. In particular, enhance the research of relative theories and practice, the publicizing of captive insurance company, the training of talented person. In a word, use all the strenght that can be used , make all helpfull to captive market developing knowledge, technology and management factors take effort, to boost the development of our captive market.