The Opening Of China's Insurance Market And Government Regulation

The countries in the world have been more and more deeply connected with each other under the global economics. The economy of every country infiltrate each other,rely on each other, and condition each other. Opening domestic market and developing cooperation have been the rational choices of many countries. As a sub-system of the economy, the insurance industry is faced with the same challenge.The foreign insurers have been permitted to set up offices of the charged affairs in China in the middle of 1980s. From then on, problems about whether the insurance industry should be opened and the proper degree of openness have been the focus of the insurance research. Until now some basic agreement has been made and proved by the practice of opening China's insurance market, that is, opening China's insurance market is necessary not only for the purpose of China's economy development and insurance industry's consummation, but also for the financial market's internationalization. Some experts have pointed out the aims and strategies of opening China's insurance market in the light of "with limitations, choices , and processes".Out of former consideration, complying with the domestic systematic project of innovation, China begun to open the insurance market and gradually deepened the process. Up to late 1998,14 foreign and joint-venture insurance companies got the permissions to operate in China, 202 offices of the charged affairs from 113 insurance organizations of 14 countries and sections have been set up in China. In April 1999, China Insurance Regulatory Committee (CIRC) decided to give authority to four other foreign insurance companies from America, UK and Canada. The opening area was also enlarged from the city of Guangzhou and Shanghai to four other cities such as Shenzhen, Chongqin, Tianjin ,etc. So on the whole, the opening of China's insurance market has marched from the experiencing step to the half-opening step, which means the extension of opening area and the facing objectives. China has accumulated some meaningful experience on opening the insurance market, at the same time, related problems have occurred. When talking about the circumstance of domestic and overseas, the development of domestic insurance industry has showed some new characteristics. In the multilateral negotiations for China to return to WTO (World Trade Organization) and recover signatory state to GATT (General Agreement of Trade and Tax), the openness of China's insurance market has been a main counter. Another factor is that international insurance capital has intensive desire to enter into China's insurance market under the expanding compulsion. Government plays the most important role on opening China's insurance market because the degree and process of openness is actually decided by it. The eventual aims of the analysis made from multiple angles is to deduce the strategic suggestions for government supervision on opening China's insurance market, including the affirmation of the supervision objectives, strategies, methods, focal point and the construction of supervision system.This article can be divided into five parts. Part one: the relationship between opening China's insurance market and government supervision. It gives the basic causes the government intervening into the insurance market. (1) The theory support---market failure; (2) The government supervision for insurance industry under this frame has its more special causes, such as the future characteristics of insurance operation, the different levels of knowledge about insurance products for the insurer and the insured ,to procure the insurance market's development in its initial growth phase and the insurance market's proper competition; (3) More deeply we will look at the government supervision for the insurance industry under the circumstance of opening to outside. Part two: the current situation and existing problems on opening China's insurance market and government supervision. In this part, the author looked through the process of...