China's Insurance Funds Used In The Legal And Regulatory Problems Of The Capital Market Study

Accept insurance and investments of insurance funds are both significant profit-earning sources for insurance companies. However, affected by old convention, insurance companies in China always tend to pay much attention to the accept insurance business to earn premium while hold an ignorant attitude towards the utilization of insurance capital by depositing large amount of insurance premium in banks, which means investment with insurance funds was not on the healthy development way. Meanwhile, government adopted a supervisory principle by enacting the Insurance Law of 1995 which imposed a strict restriction on the investment of the insurance capital, only areas as bank depositing, trading government bonds and financial bonds allowed. This policy shows two-side effect, on one side, it controlled the investment risk in a strict scale which at the same time on the other side set a overwhelming barrier for insurance companies to access to more sources of profit-earnings.Actually, when we study the fact of insurance industries in western developed countries, it's a common way to invest with insurance capital into capital market. The investment features can be described as large scale of investment amount, high profit margin and broad channel of investment. Investment with insurance capital is a bilateral-won method to enhance the healthy development of capital market, especially for the countries with sound legal system and developed market.As the great development of the domestic market in China and the competition from foreign insurance enterprises, domestic insurance companies'profit ratio of accept insurance business keeps dropping down. Great pressures consequently emerged which affected insurance companies intensively. Fortunately, government took measures by...