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China's insurance law to be revised The draft of the revision of the Insurance Law is expected to be submitted to the National People's Congress by the end of 2006 or the beginning of 2007, released Wu Dingfu, Chairman of China Insurance Regulatory Commission, on September 23. Wu said a special team was appointed to be responsible for the work. And the task has begun. The existing Insurance Law puts the insurance capital under very strict control, which has given rise to problems with the development of the sector. Wu compared the sales and investment to two "wheels" of the insurance. "If the wheel of investment does not move, " he explained, " there would be imbalanced development." The new Insurance Law in effect for less than two years, as well as relevant regulations, states that the capital can only be deposited with banks, buy or sell government bonds or financial bonds. It offers the possibility of more channels of investment with the expression of "any other way of capital use stipulated by the State Council". Besides the issue of investment, rules concerning insurance contracts also need revising. In the first insurance development blue book, China Insurance Regulatory Commission has highlighted the problems in the effectiveness of the contracts, interest principles of insurance, obligations of insurers, reinsurance contracts, beneficiaries of life insurance contracts, etc. Flaws in these rules have affected the promotion of the sector and disputes handling. China had its first Insurance Law in 1995. The draft of the first revision of the Law was approved by the National People's Congress. However, the revision was made to adapt to China's WTO campaign. The revised version has been in effect since January 1, 2003. |
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