Study On Legal System Of Environmental Liability Insurance In China

With the further development of our country’s economy, environment pollution accidentshave stepped into the high-incidence season. Environment pollution accidents not only causeserious body injury and property losses to victims, but also results serious contamination andecological destruction, involving huge compensation cost and environmental governance cost.Once the accidents happen, the polluters would bear corresponding liability to paycompensation according to the polluter-pays principle and the principle of no fault liability.However the huge cost normally gets the enterprises into bankrupt, which will further cause aseries of social problems like the increase of unemployment rate and ineffective compensation.Also, the national economic sustainable development and social stability will be consequentlyaffected and environmental pollution will not be well governed as well. The government asthe social manager, often "pays" for enterprises’ pollution discharge behavior but sometimesthe compensation for victims cannot be fully affordable due to the limited financial budget,which will aggravate the contradiction between the government, enterprises and the victimsand seriously affect the construction of harmonious society of our country.The environmental pollution liability insurance system which runs well in foreigncountries, transfers the compensation risks and environmental governance risks that should beborne by enterprises to insurance agencies through insurance contracts and then disperse themto the other enterprises with the same environmental risks. Under the system, not only can thevictims be effectively compensated, the financial burden of both enterprises and thegovernment will also be reduced. Moreover, the system will make the enterprises pay moreattention on their own environmental risk control, reduce and prevent environment pollution.But the development of environmental pollution liability insurance system in China is notoptimistic. Since2008, the environmental pollution liability insurance has been implementedin some areas of China and lots of problems have been found that can be mainly summarizedas follows: Firstly, the environmental liability insurance legislation is not perfect, the legalstatus is low, and the further promotion is difficult; Secondly, the design of the environmentalliability insurance system is not reasonable, such as high insurance rate, narrow coverage, lowinsurance quota and so on; Thirdly, the enterprises are underpowered on diversification ofrisk, the insurance capacity is limited, the government support is not enough, and theconsciousness of safeguarding their legal rights for the public is generally not high; Lastly, relevant supporting system is not perfect, such as the lack of specialized agencies andoperation mechanism on environmental risk and loss assessment. Due to the problems above,the development of environmental pollution liability insurance in our country is slow, and theeffect is not obvious, but we cannot deny that the environmental liability insurance is thetransfer of risk and has the effect of promoting economic development and social stability.Because of the particularity of the insurance and its short history of implementing in China,the system is still hard to be compatible with national conditions at present. Therefore, it isnecessary for us to keep studying the system on the basis of the existing experience, so thatthe system can play its function properly and effectively solve the environmental problems.This article will take the environmental pollution liability insurance claims of TianjiGroup as an example to analyze the problems existing in practice in our country, explore thereasons why the development of the system is so slow and correspondently put forward theimprovement measures and suggestions, so that the system can soundly run in China andeffectively solve the environmental issues in final. More specifically, this paper will bedivided into four parts. The first part introduces the environmental pollution liabilityinsurance claims of Tianji Group in Shanxi province and points out that the insurance quota isset up too low to be consistent with the actual losses of the enterprise. What causes the lowerinsurance quota involves the lack of environmental liability insurance law in China, insuranceenterprise underpowered, the limited insurance capacity, the imperfect environmentalassessment and the other supporting security system ect., which reflects the current situationof the development of environmental liability insurance in China. The second part will statethe basic theories of environmental pollution liability insurance, including the concept, thecharacteristics, the theoretical basis and functions, through which, it is hopeful that theenvironmental pollution liability insurance can be clearly identified and understood by theparties involved. The third part introduces the current pilot situation of environmentalpollution liability insurance in China, and analyzes the problems the insurance has in practice.This part is considered as the essence of the article. In the last part, relevant suggestions onconstructing the legal system of environmental liability insurance will be given on the basis ofthe analysis provided before.