Research On Internal Control Of Insurance Companies In China

Since the reform and opening up, China’s insurance industry has been developing rapidly. Both the market scale and participate are expanding and increasing rapidly. Even so, China’s insurance industry is still in the initial stage of development, Considering the two indicators:the depth and density of insurance, the depth and density of insurance of China for 2012 ranked sixty-first and forty-sixth respectively in the world, lower than the average level of other developing countries. At the same time, China’s insurance industry is also facing the structure imbalance, insurance market by way of system constraints, insurance market is not perfect and other issues. After joining the WTO, foreign insurance companies entered into China’s insurance market, intensified market competition, China’s insurance industry is also facing new opportunities and challenges.At present, China’s insurance industry also did not give full play to the advantages of long-term capital, failed to fully participate in the people’s livelihood of major infrastructure and urbanization, etc.. According to statistics, at the end of July 2014, the use of insurance funds amounted to 8.52 trillion, mostly was used to the banking system through various ways, the docking of long-term capital allocation efficiency and the real economy is still not fully. Because the insurance market is closely linked with the capital market and monetary market, therefore the insurance company is also facing more and more complex risks, and increasingly the investment environment, monetary policy and the impact of risk factors. In this case, how insurance companies to embody the advantages of their own, how to improve the ability of its risk control becomes more important.At the same time, the listed insurance companies are facing more pressure. First of all, the listed insurance companies faced with the double regulation CIRC and the CSRC, the listed insurance company behavior and disclosure must ensure compliance, legality. With the external regulations and audit gradually improved and strengthened, the objective requirements of the listed insurance companies must improve the quality of internal control and improve the quality of information disclosure. On the other hand, with the pressure of competition of listed insurance companies faced is becoming more and more big, the enterprise must strengthen internal management and risk prevention and control, to ensure that reduce the business risk and improve the level of overall profit.As a result, insurance companies should study methods and approaches to risk prevention practically, keep away from and defuse inner risks and external risks positively. Internal control is the first line of defense for risk prevention of insurance companies and holds a fundamental position. Primary task of improving risk control ability for insurance companies is to perfect internal control system.The paper sets about the current situation of internal control of insurance companies, combines with employment experiences and personal experience in each department of insurance companies, compares and concludes rule-breaking operations of multiple insurance companies’internal control involved in recent written decision of administrative penalty in China Insurance Regulatory Commission.and summarizes problems appeared in six internal control links of insurance companies, including financial reports, settlement of claims, application of funds, sales section, human resource and administrative management. The paper also explains the primary cause that generates these problems in detail and analyzes these problems practically, and summarizes some approaches to solve these problems simultaneously from the practical work. It hopes to obtain some maneuverable and effective paths and approaches to establish perfect enterprise internal control by exploring and researching internal control system of Chinese insurance companies.