China Reinsurance Supervision

Reinsurance, like the original insurance, is regulated in different degrees by every country. Although both parties of reinsurance contract are sophisticated professionals, once reinsurance loses affordability, it will affect the financial situation of the original insurance and eventually affect insured's benefit. Therefore, every country tend to strengthen the supervision and management on reinsurance industry. After 20 years' reform and opening development, China insurance industry has made a great progress not only on premium income but also on the number of insurance branches. However, compared with those developed countries, the insurance market of China is still developing, the reinsurance market even further behind. Since our reinsurance market is in the initial stage, it faces a lot of problems including low commercialized economy, inefficient management model, insufficient capital supply, and low technology and poor service. China has already joined the WTO, according to China's commitment to the entry of WTO, more and more foreign companies will do business in China. There will be great changes on the regulation of insurance market, especially on the reinsurance part. Upon the entry, foreign companies are allowed to provide life and non-life reinsurance service in the form of joint ventures. And there should be no limitation of the number and districts; legal reinsurance business is to be reduced by 5 percent annually until canceled. Which means that 20 percent legal reinsurance share will be cancelled in 2006.It is quite a challenge for China's reinsurance market . So, it has important meaning in both theoretical and realistic aspects regarding how China Insurance Regulatory Committee will strengthen the administration on reinsurance market. The question will be discussed in the followingfour chapters.Chapter 1: The history and development of reinsurance. Logic starts wherever history starts. The thesis starts from the origin of reinsurance, focusing on the history and development of world reinsurance and China reinsurance, the purposes and the characteristics of the supervision on reinsurance. (1) The origin and development of world reinsurance first appeared in marine transportation. (2) It consists of two parts: one is the origin and development of reinsurance industry aboard, the other is the historic and current situation of China reinsurance market. In the meanings of supervision and management on reinsurance. (3)It distinguishes the characteristics of supervision between the reinsurance and the original insurance. Chapter 2. Current situation and experience of supervision on reinsurance aboard. Western developed countries have long history and lots of experience, from which we should learn something . This chapter includes four sections (1) General introduction about the supervision of international reinsurance, which gives us a basic understanding. (2) Developed countries' supervision on reinsurance, such as the United States, England and Germany, which include management models and introduction. (3) Introduction about some new world reinsurance markets. (4) General experience of supervision on reinsurance from countries all over the world, from which China can benefit.Chapter 3: Current situation and existing problems in China supervision on reinsurance. In order to analyze the problems, first we need to know China's current situation, which includes two sections. (1) Current situation. China insurance is a young one. Reinsurance has shorter history than the original insurance. In 1988,according to TemporaryAdministrative Regulation on Insurance Companies, China started to have separate legal insurance. In 1996, the People's Insurance Company of China was grouped into China reinsurance Company. Since then, the first commercial company was generated. Therefore, China's reinsurance market is still in the initial stage. (2) Existing problems. Since reinsurance is new to China, It faces lots of problems including incomplete reinsurance regulations,...