Establishing Compulsory Environmental Liability Insurance Legal System In China

With the rapid development of Chinese economy, the problem of environmentalpollution is worsening. Environmental pollution accidents have been broughtchallenges to the environmental compensation system. As one of the ways to solve theproblem of environmental pollution damages, compulsory environmental liabilityinsurance can ease social conflicts brought about by environmental pollutionaccidents, and protect the interests of the injured third party effectively. What’s more,it will disperse business risks. For now, China does not have compulsoryenvironmental liability insurance legal system, and academic understanding ofcompulsory environmental liability insurance is divided. Therefore, to research thislegal system will be very useful for our country’s practice.According to the requirements of Insurance Act, compulsory environmentalliability insurance can only be prescribed by the state laws and administrativeregulations. Compulsory environmental liability insurance legal system is the systemwhich goals to spread environmental risks and protect the interests of victims, and inaccordance with the state laws and administrative regulations, enterprises within theprovisions must be insured, and the insurance companies must be insured. It has moreadvantages than any environmental liability insurance legal system. For example, itcan strengthen the protection of the interests of victims, and it has more governmentsupport, and it’s more conducive to improve the environmental pollution situation.Because of its advantages, the countries whose environmental liability insurance legalsystem has been running good have adopted this system. And this system has becomea trend. Chinese establishment of compulsory environmental liability insurance legalsystem has the necessity and feasibility, performing in its implementation in line withChinese reality needs like improving the environmental pollution situations, balancingthe interests of the main environmental parties, perfecting the environmentalprotection market, easing some social contradictions and implementing environmentalequity and risk prevention. What’s more, implementing compulsory environmentalliability insurance legal system has theoretical and practical foundation.In China, high pollution industries and enterprises in key areas should insuredcompulsory environmental liability insurance. And the state-owned insurancecompanies and the wealthy private insurance companies can separate or be co-insurance body to cover this insurance. As an environmental manager, governmentshould lend support to it. Compulsory environmental liability insurance should coverthe third person’s personal injury and mental damages, and the direct and indirectproperty losses, as well as the administration fee to cover the insured’s own site. Inorder to control the moral hazard of the insured, this insurance shall stipulate exceptresponsibility, liability limit, and a differential and floating interest rate. In short,compulsory environmental liability insurance legal system in China must be fullyconsider its national conditions, and design specific and clear to strengthen thepractical operability.