NU Online News Service, Jan. 6, 2005, 12:56 p.m. EST
The Chinese Insurance Regulatory Commission is setting up an Insurance Protection Fund.[@@]
Foreign and domestic life insurers will have to contribute up to 1% of retained premiums to the fund. The CIRC wants the life fund assets to amount to about 1% of total life insurance industry assets, officials say.
If life insurer fails, another company must take over the failed company’s policies. The life insurer assuming the failed company’s assets will get compensation equal to 90% of the individual policyholders’ losses, officials say.
No life insurers have failed in China since China began reviving its private life market in the 1980s, but several have failed or come close to failure in Japan.