| Insurance,a special trade that operates risks,is playing an increasingly important role in recovering loses,resuming economic operations and stabilizing the national economy. Since the Liberation,or rather,since the restoration of domestic insurance services in 1979,the Chinese insurance industry has not only experienced significant growth in premium,but also,after eliminating the monopoly power of the People's Insurance Company of China,formed a booming market with various competing companies. However,it is not without problems. This article,with all the problems taken into consideration,intends to analyze the problems with and give suggestions to improve the internal control systems of Chinese property insurance companies to ensure their sustained and sound development. As to the practical means of improvement,the author maintains that,in addition to the conventional methodology,we should adopt quantitative indexes for management and control.Chapter One The Development of Chinese Insurance Industry And It's ProblemsI. A survey of Chinese Insurance IndustryThe development of insurance industry in our country is not altogether smooth. A preliminary insurance market came into being in the late 1980s with the appearance of a number of domestic- and foreign-fund insurance companies. The market,though having contributed a lot to the national economy,is itself problem-ridden. Viewed from micro-perspective,there are problems like insufficient supply or demand,unbalanced development and improper managerial conception and strategies;from macro-perspective,in addition to the lingering influence of monopoly and governmental intervention,there are the conflicts between the development of the market and institution,business and supervision.Insurance is a special industry operating the risks that can be categorized into different levels. Only when we understand the nature of insurance industry as well as the insured objects,can we develop sound strategies that can reduce the risks involved to a minimal degree.II. The Current Supervision and Management System of Insurance Industry and Its ProblemsThe supervision and management system has a mandatory power over all the participating businesses,because their survival and development depend on the measures taken by the system. In other countries,the government tends to reinforce such mandatory power,in reference to the risky nature of insurance industry. However,in China,the supervision and management system is still on an early stage. Before 1998,superintendence is performed,very insufficiently,by the People's Bank. Now,much attention,which should be directed to business,is paid to institutions. Moreover,there lack efficient measures,especially mature laws in the system.Each institution responsible for supervising and managing the activities ofinsurers,has its own strength and weakness. It can be concluded that we can block every source of non-system risk if we attend to every step in insurance operation and administration. A complete internal control system is indispensable to reach this goal.Chapter Two An Overview of the Internal Control System of Property Insurance CompaniesI. Definition of Internal Control SystemInternal Control system,which refers to all the internal coordinating means and measures taken by an enterprise or by organizational planning,is developed and refined when the enterprise reinforces its administration and meets social demands. It is both an accounting and administrative system. The urgency to fortify internal control system can be attributed to its own development,the unstable macro-economic policies,the weak supervision and management system and the modification and development in auditing methods.II.The Structure of Internal Control System [.Principles of Internal ControlConducting stable and legal operation,preventing risks,and allowing moderate competition2.The Overall Structure of Internal Control System1). Organizing System:It conducts target control of all positions,categorizing them into degrees,... |
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