Study On The Construction Of The Second Pillar Of Solvency Regulation Of Life Insurance Company In China

Capital held by insurance companies is an important factor for its solvency ability. The governance structure, risk management, internal control also play indispensable roles. Now solvency regulatory system is lack of comprehensive risk management requirements for insurance companies. With the development of European Union Solvency Ⅱ, China should follow the international regulation trend to improve our own solvency regulation.In the development of insurance solvency regulation, the issue of the framework of European Union solvency Ⅱ is one important milestone. It draw some lessons from Basel Ⅱ and introduce qualitative requirements of insurance solvency regulation for the first time. As China’s insurance market is an emerging market, the CIRC(China Insurance Regulatory Commission) adopts qualitative requirement into the regulation system, mainly concerning some unable quantified problems. New system includes the following part:regulation analysis and examination, the risk management of the insurance company, the overall rating of solvency and regulatory measures. This is a new period for the regulation of the solvency of China’s insurance industry, deserving more study and research.There are six chapters in this article. The basic perspectives are as follows:The first chapter is the introduction. It quote ten years’data of insurance industry in order to introduce the background and meaning of the paper. And then I analyze the main content and research methods. At last, the article gives possible creative parts and shortages.The second chapter introduces some classic theories and some basic ideas, mainly concerning solvency of the risk management.The third chapter introduces the development and enlightenment of foreign life insurance company solvency system. The topic of this paper has abundant practical experience in other countries. Therefore the introduction will be quite detailed. This chapter includes two parts. One introduces the regulation system of foreign countries whose solvency regulation system is based on the three-pillar framework, for example EU and Australia. The second part give a brief introduction about non-three-pillar countries, for example America and Switzerland.The forth chapter analyze history and current situation about China’s solvency regulation system of life insurance company. I divide the development course of China’s life insurance company solvency regulation into four stages which named at the budding stage, specialized stage, formation stage and construction stage. Now the most important phase about construction of solvency regulation system is coming.The fifth chapter is trying to build the second pillar necessary analysis of China’s life insurance company solvency. The main motivation is global insurance solvency regulation unified, disadvantage about the first pillar-quantitative requirement and objective requirement about emerging markets of China’s life insurance.The last chapter is the core part of this article. At first I introduce the main principles and objectives for construction new system. The process consists of two parts:life insurance company’s internal risk management requirements and regulatory requirements. Finally I analyze the effect about construction second pillar regulation and appropriate supporting methods.