Study Of Insurance Company Insolvency Standards

The insurance company has unique operating risks,which differ from other general enterprises.Once the insurance company bankrupts, as the insurer and insured cannot match in time for rights and obligations, the insured will be lost the insurance guarantee and suffer economic losses even the contract is not expire.Because a bankrupt insurance company have a large numbers of insured,this will have a great negative effect on the economic operation and the whole society's stability.Therefore most of counties made special rules about the insurance company's bankrupts,such as the standard of insolvency and the procedure of insolvency is differ from other general enterprises.Because there are lack of the clear standards of the insurance company's bankrupts,so it is hard to made a good disposition.Therefore the paying ability of insurance company is recognized as the core of government regulation.The insurance company solvency refers to an insurance company's fulfilling the reparation that the insurance contract arranges or the paying ability.Takes the solvency regulation of non-life insurance company as priority.In China,it is required to separate property insurance and life insurance,so we have non-life insurance company and life insurance.The paying ability of non-life insurance company include legal capital,caution money,insurance liability reserve, minimum solvency margin.This part mainly studies minimum solvency margins and non-life insurance reserves.The minimum solvency margin is the capital requirement for insurance continuity set by regulatory authorities.The viewpoint of this dissertation is that the standard of Insolvency is lie on the situation of the solvency,when the solvency of insurance company is not suit the minimum solvency margin,it would be required to made it up.When the insurance company can't made it up,it will face the doom of bankruptcy.To improve the paying ability of insurance companies,the highest risk of insurance is solvency risk.So to reinforce the solvency inspection is to ensure successful operation and development of and to protect the interest of policy holders.China insurance regulation organization takes solvency as the priority.The present paying ability regulation is built based on European Union system.So on one hand,we are to learn from European Union's theory and practice,and on the other hand we can't accept the system that is unsuitable for Chinese reality. We will also learn advanced experience from USA,Japan,and so on to build insurance regulation system for China specifically.