The Legislative Predicament And The Way Out Of Housing Reverse Mortgage Insurance In China

Population aging is a common challenge for all mankind.With the acceleration of the process of population aging,the proportion of the elderly population in our country is increasing day by day,and the government’s financial burden is so heavy that the current government-oriented pension model is difficult to realize the all-round and full-term social pension.In order to speed up the development of pension services,China Insurance Regulatory Commission proposed to carry out housing reverse mortgage pension insurance pilotin 2013.In 2016,"Opinions on the Key Work of Deepening the Reform of the Economic System " has once again made it clear that it is necessary to speed up the development of the old-age service industryand promote the pilot project of housing reverse mortgage pension insurance.What’s more,there has launched pilots in Beijing,Shanghai,Guangzhou and Wuhan.Housing reverse mortgage pension is based on the idea of housing for the elderly,allowing the elderly who reach a certain age and have ownership of the property to mortgage their property to the insurance company and receive the pension according to the terms of the contractuntil their death.In addition,as mortgages they can continue to possess the house,use the house,and dispose the house with the mortgagee’s agree.Housing reverse mortgage pension insurance in our country is introduced from housing reverse mortgage system of foreign countries.In these developed countries it is a relatively mature financial product,it has been proved to be an effective way to support the old-age pension.Its greatest feature is that the elderly still have the right to live in the mortgaged house during their lifetime,which will increase the income for the elderly,but also ensure house insurance for them.Introducinghousing reverse mortgage pension insuranceis conducive to the full integration of social resources and the establishment of a more equitable and more sustainable social security system.Finally it will ensure that the elderly have a higher quality of life in their later years.Throughout the evolution of the international social security system,it’s the trend that usemarket mechanisms to operate social security undertakings and establish capitalized modern social security system instead of redistribution-based old-age security system.Both economictheory such as the theory of resource allocation and the theory of division of property rights,sociological theory such as the theory of life cycle and the theory of family wealth and intergenerational transmission,and the theory of mortgage guarantee have laid the theoretical foundation of housing reverse mortgage insurance.In view of the present situation of urban and rural old-age security system,there are many problemsin our country.Firstly,the old-age system is unreasonable,which over-relies on the government-led basic old-age insurance while the role of corporate annuity and personal savings pension insurance is minimal.Secondly,the social security system coverage of our country is so narrowthat the elderly in rural areas are not included in the scope of social security in the long-term,and the function of pension by land is also weakened.Thirdly,compared to soaring prices,the low level of old-age security determines that the reform of China’s pension insurance is an inevitable requirement.Moreover,with the substantial increase in the housing rate of our residents,the introduction of property tax as well as the transformation of the concept of pension,they all provide feasibilities for the development of housing reverse mortgage pension insurance.Although there are some experience can learn from,but housing reverse mortgage insurance as an exotic,there still are some obstacles for its development to the rule of law in China.Such as the constraints of the land ownership system,the lag of "Insurance law" and other relevant supporting laws,the sub-business and sub-industry regulatory restrictions of financial industry,and the lack of government support policy.To reform the pension insurance system andinnovate the old-age model in our country,we must cultivate suitable legal environmentand create a favorable policy environment.On the one hand,the housing reverse mortgage old-age insurance as a combination of land,housing and old-age insurance,China must break through the urban residential construction land use rights limit,loan collective construction land circulation restrictions,improve the "Insurance Law" and other relevant supporting laws.On the other hand,the housing reverse mortgage insurance as an innovative tool of China’s financial insurance,it needs to breakthrough the current strict operating system,connect the financial,insurance,investment securities and other financial instruments and means closely to achieve the integration of bank security and promote the development of asset securitization.Meanwhile,because ofthe characteristics of commercial and social welfare,it is necessary to provide lot of policy support and improved regulatory system to develop housing reverse mortgage pension insurance,such as establish a sound market access and exit system,set up an independent non-profit advisory body,build government guarantee mechanism and other incentive system,and improve the information disclosure system by establishing social credit system.