The Research Of Insurance Business Tax's Impact On The Life Insurer's Solvency In China

Insurance industry plays some role in safeguaring the economic society. But many scolars prove that insurance industry develops with the economic growth, otherwise it didn't play proper functions on economic society. Now china face the situation of the economic restructioning, and it correspondingly demands the insurance restruct to adapt to the economic development. But the current business tax system affects the development of life insurance. Therefore, this thesis researches the relationship of insurance tax and the solvency of life insurance company by theoretical and empirical analysis in order to reform the business tax system and improve the life insurers'solvency to promote the life insurance industry.This thesis selects a domestic listed life insurer to construct econometric models to research the relationship of insurance business tax and the life insurer's solvency in two stages. At the beginning of the insurance business tax policy's adjustment, the life insurer could not adjust insurance price. But consumers would change their current insurance consumption behavior according to their anticipated changes in price and the mental accounts.Thus it affects the life insurer's solvecy of the current period. By constructing an econometric model with policy dummy variables ,this thesis shows that improving business tax would raise the life insurer's solvency, but reducing the business tax would get an opposite result. After the life insurer's adjustment according to the business tax policy, the insurance market would generate a new equilibrium. This thesis constructs an econometric model including the order-lag rate of insurance business tax, and the result shows that the first-order lag rate of insurance business tax is negatively correlated with the life insurer's solvency. Because the insurance business tax base, instanding of insurance business, is negatively correlated with long-term solvency of the life insurer, and net assets profit margin is relevant, this thesis stands by the views of that china insurance industry recently develop fastly, but nor is their profitability and solvency.This theoretical and empirical ananlysis find that reducing the insurance business tax is important,but it should reasonablely control the frequency of insurance business tax adjustment in order to play the role of tax policy in the insurance development.This thesis's feature is to research the insurance business tax's affect on the life insurance industry from the point of solvency, and apply economic theory and insurance consumption behavior theory to explain the affect. Compared with the other thesises on insurance business tax and solvency, this thesis constructs a econometric model including both virtual variables and order-lag rate to research the relationship between the life insurers'solvency and the insurance business tax's adjustment or the insurance business tax. And this thesis finaly proposes sub-regional tax policy and controling the frequency of insruace business tax's adjustment.Therefore, in order to improve the life insurace industry's solvency and promote the insurance industry's transformation, china should reform the current insurance business tax system to make it more reponsive to the requirements of economic restructuring, and to play its fuctions in economic society.