Public insurance company solvency less than short-term business growth too fast

Extensive development is the main reason

July 15, 2008, at a national insurance work conference on supervision, the China Insurance Regulatory Commission Chairman Wu Dingfu, the first disclosure of the 12 insurance companies in different levels of solvency less than the risk.

Two days after the July 17, the China Insurance Regulatory Commission in one breath and announced the details of the nine insurance companies replenishment, including five General Insurance Corporation and the four life insurance companies, are: all state General Insurance, Huatai Choi Insurance, the Bank of insurance, public insurance, Wing On Property Insurance, China Aviation Samsung, Pa Hsin-cheng Life, China and the United States metropolis, Haier New York Life.

Inadequate capacity to trigger payment of reasons, Wu Dingfu analysis at the meeting: "the general level of solvency industry decline, in addition to the stock market continue to lower the impact, the key reason is that some of the extensive mode of development, product structure is irrational, company profitability Is not strong or even long-term losses, mainly dependent on shareholder capital increase or maintain the solvency issue Ciji Zhai. At the same time, some companies there are shortcomings in the management structure, failure to establish effective internal risk management mechanism, operating in the short-term behavior rather conspicuous. "

At the same time, the China Insurance Regulatory Commission also said that the rapid development of a lack of short-term solvency of the company, to urge the company by limiting the scale of business, the strengthening of security, optimize the business structure, and other measures to improve the solvency, as well as through the listing, replenishment Kuogu , Issued Ciji Zhai, and other ways to raise capital, lack of solvency ease the pressure.

CIRC also announced the same period, the first half of 2008 a total of 23 insurance companies for the replenishment of its registered capital, and many of them are already conducted a capital increase last year.

Although busy with so many companies replenishment, and most of all for the generous, but in the insurance industry, solvency seems to be insufficient for the lack of fear.

Have an accounting of the State Property Insurance that the payment capacity of one of the major factors in the interests of its shareholders. They company is also in the capital increase completed this year, after the capital increase greatly enhance the company's ability to pay.

Pacific Antai Insurance Company, a manager believes that this industry is a common phenomenon. The number ratio is adequate, safe, countries vary.

An internal safety groups believe that the lack of solvency of the company should be more because of excessive short-term business growth.

He Zhong Life stakeholders also said that the solvency adequacy ratio equal to the insurance company's actual capital and minimum capital ratio, the minimum solvency of the insurance companies in the commitment on the basis of existing liabilities, further support the future development and the establishment of early warning indicators. Solvency is a dynamic indicator, the insurance companies in the course of business, even if a lack of solvency, but also to increase capital, rational use of insurance funds, operational structure adjustment and control costs, and other measures to resolve this problem.

China Insurance Regulatory Commission to urge self-administered home insurance rate

If lack of fear, why the China Insurance Regulatory Commission launched a new requirement » What is the ability to pay »

Ability to pay is to protect the interests of the insuring public warning line is that insurance institutions to carry out the responsibility to pay compensation or ability, but also insurance agencies and financial strength of its own commitment by the risk of liability for comparison.

July 14, 2008, the China Insurance Regulatory Commission promulgated the "Regulations on Management of insurance company solvency," and on September 1, 2008 shall come into operation on the same day the abolition of the "amount of insurance company solvency and monitoring indicators management regulations."

According to the latest release of the China Insurance Regulatory Commission, according to solvency status, lack of insurance companies are divided into categories, sufficient Class I and Class II adequate three companies, its solvency adequacy ratio was below 100%, 100% to 150%, higher than the 150 per cent.

Green, spokesman for the Group of Health in Shengrui "Securities Daily" in an interview explained that the CIRC is the timely introduction of new regulations and more scientific and rational, more stringent regulation also is conducive to the health of the whole industry, sound Direction. In solvency, Green is the new standard classification of the best Class II, the company is insolvent adequate capital adequacy, business options and cost control have not done better.

The strategic joint-venture insurance company manager said that the China Insurance Regulatory Commission launched a new policy should be based on risk considerations. China's insurance industry and the various foreign countries, will not be easy Discard. However, such as the first half of this year and frequent catastrophic circumstances, significant increases in pay, a lot of runs on may also lead to a risk management company.

Central University of Finance and insurance Dean of the School Professor Hao Yansu think that the new requirements more standardized, more highlights the importance of solvency.

However, it is worth thinking is that Professor Hao At the same time, we have adopted Western standards of solvency to monitor China's insurance companies, the equivalent of a doctoral standards to require primary and secondary school students, so, or not good. Long-term perspective, these standards are not the problem, but the short-term view, a little flexibility can actually be, of course, regulatory bodies continue to knock the alarm is on.

"However, we should see that the solvency is a de facto concept. For a business, if long-term solvency certainly a lot less than the risk. If it is only produced in less than a de facto, it is easy through the business The adjustment to adjust. We play an analogy, China's insurance companies is a juvenile, although the 100 young people can not afford the burden of carrying the rice, but we can not say that he has no strength. "Professor Hao analyzed.

Solvency under bankruptcy ≠

From the China Insurance Regulatory Commission announced the news, the insurance company has paid insufficient capacity is not the first time this year. CIRC Chairman Wu Dingfu said here before that too, the end of 2007 found that 10 insurance companies paid insufficient capacity.

In 2005, the China Insurance Regulatory Commission has also proposed that domestic Chinese-funded life insurance company solvency widespread the problem of insufficient. The three major life insurance giant China Life Insurance Group, Pacific Life Insurance, Xinhua Life Insurance was insufficien solvency, including the status of Pacific Life Insurance most serious.

At that time, set off by the media after the uproar. It has been : like a business could go insolvent bank loans? »

But previously, director of the China Insurance Regulatory Commission regulations Yang Huabai in an interview has said that if an insurance company's solvency is too low, there will be the risk of bankruptcy, but in China, insurance companies will not easily collapse . Because the insurance companies assess the sustainability and stability operations is an important indicator of solvency, China's insurance regulatory department of insurance company solvency very strict supervision.

Therefore, in 2006, the China Insurance Regulatory Commission will promote a number of insurance companies through capital increase Kuogu, issued Ciji Zhai, the introduction of foreign strategic investors a variety of ways, such as capital adequacy.

2007, the Sino-British Life, the people's livelihood Life, the Dean of the insurance companies have a large scale, such as the implementation of the replenishment Kuogu. And the three major domestic insurance industry giant China Life Insurance, Ping An of China, China Taibao have landed the A-share market financing. As at the end of 2007, the insurance industry has total capital of over 200 billion yuan.

Even so, Professor Hao Yansu in the eyes, is still insufficient to fear. The entire insurance industry also equivalent to the total capital of the Industrial and Commercial Bank of China 1 / 3.

Professor Hao, "China's insurance market is a Douya Cai market, but a lot of stamina for the development of the market. And overseas markets have developed to a certain shape, very little room for expansion. If in the future have good expectations With the increase in new business, many will be followed to resolve the problem. "

July 29, 2008, the China Insurance Regulatory Commission in the second quarter of a routine press conference, Assistant Chairman of China Insurance Regulatory Commission said Li Yuan, "solvency adequacy ratio reflects the insurance company a de facto capital adequacy of insurance regulation indicators , It is similar to commercial banks capital adequacy ratio, not as some people say, lack of solvency means the company will be bankrupt. "