Research On The Legal System Governing Commercial Insurance Compaines In China

As a type of for-profit and non-compulsory insurance, the commercialinsurance is an important supplement to the social insurance. The commercialinsurance is characterized by its high risks, its debt maintaining nature andprofessional. Effectively regulating the commercial insurance companiescould guarantee the normal operation of the commercial insurance companiesand the steady development of the commercial insurance market; it couldalso protect the interests of the policyholder, the insurant and theshareholders of commercial insurance companies.The insurance industry in Hong Kong has a long history and theinsurance system in Hong Kong is highly developed. Thus, drawing on HongKong’s experience in enacting legislation governing the insurance industrywould contribute to the reform and the development of the legal systemgoverning commercial insurance companies in China. In order to find aneffective path for reforming the legal system governing commercialinsurance companies in China, the author of this paper analyzed thedifferences between the legal systems governing commercial insurancecompanies in Mainland China and Hong Kong through adopting thecomparative research from the starting point of law and economics.First, the current status of the development of the insurance industry andthe commercial insurance companies in Mainland China and Hong Kongwere compared in this article. Second, to research the legal system-relatedreasons for the differences in the current status of the development of theinsurance industry and the commercial insurance companies in MainlandChina and Hong Kong, the author of this paper compared the legal systemsgoverning commercial insurance companies in Mainland China and HongKong through studying the following several aspects: the market accesssupervision, the investment supervision, the operation supervision, internalcorporate governance, the liquidation and market exit supervision, the illegal responsibility as well as the regulation approach. The supervision scope,supervision strength and supervision approach of commercial insurancecompanies’ main behaviors within the period of their continued existencewere compared and analyzed in this article. Thenceforth, current practicalproblems, which mainland commercial insurance companies are facing, wereanalyzed in this article. The differences between features and thoughts ofinsurance legislation in Mainland China and Hong Kong were found in thisarticle, and a conclusion was made that Mainland insurance industry shouldbuild up a regulation system which takes the solvency regulation, the marketbehavior regulation and internal corporate governance regulation as the coresof insurance supervision; should build up a unified and simple legislationsystem; should generally relax the strength of government supervisiontowards commercial insurance companies, improve the self-regulated systemand social supervision system.