Solutions To The Predicament Of Compulsory Liability Insurance In China

Insurance, as a social system of sharing risks and absorbing losses, plays an important role inour society’s stability and development. In the20th century, with the development of the legalliability and tort law, many countries around the world started to set up some related legislations ofcompulsory liability insurance. Compared with other countries where insurance has been welldeveloped, China’s compulsory liability insurance system falls far behind. The Automobile TrafficAccident Third Party Liability Compulsory Insurance Ordinance2006is the first legal instrumentsnamed “compulsory liability insurance” in China. It symbolizes compulsory liability insurance hasan important effect on our social life. As we know, although compulsory liability insurance hasviolated the principles of contract liberty, it helps to keep the public in normal order and protect theinterests of the third party. So it is necessary to enforce liability insurance in the certain areas.However, there are very few literature researching on compulsory liability insurance, whetherin theory or in practice. With the spirit of Several Opinions of the State Council on the developmentof the Insurance Industry Reform and Development2006, it is of great theoretical and realisticsignificance to research on the compulsory liability insurance system. This article aims at studyingon the Compulsory Liability Insurance of China, and hopes to provide useful solutions for theChina’s better insurance industry development. Besides the conclusion, there are three parts in thispaper.Part one is “the introduction of compulsory liability insurance system”. This part’s maincontent involves the definition, the theoretical basis, the legal characteristics and the value functionof Compulsory Liability Insurance. At first is about the discussion of compulsory liabilityinsurance’s social origin, legal basis and economic causes. Then in order to provide the theorysupport for the following chapters, the article will select insurance object as classification standards,to categorize compulsory liability insurance into different types.Part two is “an analysis on current situation and the primary predicament of China’scompulsory liability insurance”. After the current situation analysis，the article gives the two mainpuzzles existed in compulsory liability insurance system: the safeguard scope is too narrow and theoperation system is uncertainty. Besides, in order to elaborate the causes and performance of theproblems, this section makes an example of the Automobile Traffic Accident Third Party LiabilityCompulsory Insurance in our country.Part three is “the suggestions of the improvement of compulsory liability insurance system in China”. Based on the actual situation at home and abroad, with the research conclusion of thesecond part, the paper proposes specific measures to solve the two problems: first is to perfect therelated legislation; second is to establish a scientific and reasonable set-up system; third is to decidea reasonable operation system.