Study On The Solvency Supervision Of Property Insurance Companies In China

The solvency of insurance companies means the ability of an insurer to meet its obligations under all contracts at any time. It reflects a relationship between assets and liabilities of an insurer. Solvency is very critical to the healthy operation of an insurer. If there was a solvency crisis in an insurer, not only the insurer couldn't maintain the normal operation, but also the interests of the insured or of policyholders will be threaten or damaged, even it may have huge influence on the development of the national economy and the social stability. The solvency supervision has become an important goal and the core content of national regulations of the insurance industry. The supervision of solvency, market conductions and corporate governance are the three pillars of the modern insurance regulation put forward by the International Association of Insurance Supervisors. Because there are greet differences between the property insurance and life insurance in the business lines, management and supervision, this paper mainly analyze the solvency supervision of the property insurance companies.The solvency supervision of domestic insurance companies has gone through stages of beginning and developing step by step: before 1995, the People's Bank of China is responsible for the regulation of the insurance industry, which focused on the market conductions, few involving the monitoring of solvency; from1995 to 2003, supervision and regulatory of solvency and market conductions are paid equal attention to; in 2003, the solvency supervision was acknowledged as the core of insurance regulations. Specific requirements of solvency supervision and a series of actuarial and accounting rules and practical guides were issued by the China Insurance Regulatory Commission in the following years. In July 2008, the CICR published the "Regulations on Management of the solvency of insurance companies", which sets up the international convergence and risk-based solvency dynamic regulatory framework, provides the Complete solvency monitoring mechanism, and put forward a clear classification regulatory Request. However, the existing solvency supervision model is fixed-rate model which is learned from the first generation non-life direction of European Union, and solvency supervision indicators are from the United States Insurance Regulatory Information System. The use of these method and indicators must be consistent with the actual development of property insurance in China, and should be validated in the practice. Therefore, how to improve solvency supervision system, in accordance with China's actual property insurance development, has become an important subject for China's insurance regulation.On the basis of definition of solvency and solvency supervision, In this paper starts with the analysis of the risks faced by property insurance companies, introducing and comparing several theoretical solvency supervision models and practical application respectively, Focusing on analysis of the current stage of China's property insurance companies'solvency supervision status and using some historical data to test the reasonableness of minimum solvency margin and supervision indicators, putting forward the suggestions to improve the calculation minimum solvency margin and to correctly set up supervision indicators, and proposing a new approach , the risk-based capital method, and measures to improve the solvency supervision system, strengthening insurance companies internal control and risk management, establishing insurance companies credit rating system.Four parts constitute this paper:Chapter 1 introduces the background, research situation at home and abroad on this topic and the method used in this paper.Chapter 2 outlines the conception of solvency and solvency supervision and four theoretical solvency supervision models and their practical application respectively.Chapter 3 analyzes the current stage of China's property insurance companies'solvency supervision status and problems.Chapter 4 proposes several suggestions to improve property insurance companies'solvency supervision.