Floating premium rates for car insurance effective July 1
By Rong Xiandong (chinadaily.com.cn)Updated: 2007-06-13 14:31
China will practice floating premium rates for compulsory vehicle liability insurance nationwide on July 1 to improve vehicle drivers' awareness of driving safety, according to the insurance regulator.
Sources from the China Insurance Regulatory Commission (CIRC) revealed yesterday that a document entitled "Measures on Floating Premium Rates for Compulsory Vehicle Liability Insurance" has been completed for deliberation and relevant implementation rules have also been worked out.
The sources added that the new policy will be announced at the end of this week or next Monday. They explained that the premium rates will be allowed to float within a range of 30 percent, related to traffic accidents and breaching traffic rules.
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According to the rules, vehicle owners who buy the insurance for the first time after July 1 or are not involved in any traffic accident but only have traffic rule violations in the previous year may pay 1,050 yuan (US$137.68) in basic premiums for compulsory vehicle liability insurance.
Those who have a good record for three consecutive years will enjoy a 30 percent discount in premium rates, while those have been involved in serious traffic accidents causing casualties have to pay an additional 30 percent premium, according to the rules.
What is noteworthy is that under the new policy, car owners who are not responsible for traffic accidents do not have to pay additional premiums.
The CIRC has had talks with the Ministry of Public Security, which manages traffic safety, on the new policy and an information sharing platform is being developed, said Guo Zuojian, director of CIRC's Property and Casualty Department.
Some cities, including Shanghai and Beijing, have begun to implement the floating premium rates on a trial basis.
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