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China Confirms Plan for Setting Disaster Insurance System
Source: news.cn
Source Date: Saturday, October 18, 2014
Focus: Knowledge Management in Government
Country: China
Created: Oct 21, 2014

China's Insurance Regulatory Commission has unveiled an insurance plan to cover natural disasters.

The insurance system is to be fully implemented in 2017.

CRI's Luo Bin has more details.

Frequent natural disasters such as earthquakes, typhoons and landslides in China have raised public concerns about the need for a disaster insurance system in the past few years.

China's Insurance Regulatory Commission has confirmed China's plan to build a sound insurance system to compensate the victims of natural disasters.

This plan, for the time, provides a framework for China's comprehensive natural disaster insurance system.

Wang Zuji, the Vice Chairman of the China Insurance Regulatory Commission, explains the plan in detail.

"First, we will promote the legislation required to setup the disaster insurance system. We are going to introduce this insurance as part of the post-disaster rescue mechanism to help the victims to get back on their feet quickly. We will also work on the setting of the insurance rates and regulations and conduct some subject researches on the co-insurance."

The framework came after the release of ten new insurance policies by the State Council, China's cabinet and has been seen as a step forward for China's disaster insurance system.

Natural disasters caused a loss of 69 billion yuan last year in China.

Wu Cheng, marketing director of China Co-op. in Hainan, says they've suffered great losses before.

"The impacts of natural disasters are huge. We lost 20 million yuan this year because of typhoons. We wanted to buy insurance. Some of the farmer also wanted an insurance cover, but it was very expensive. The insurance companies were not willing to offer affordable policies. It was difficult for us to solve this problem."

The 2008 WenChuan earthquake caused a direct economic loss of over 800 billion yuan, but the insurance only paid back 0.2 percent of the total losses.

In western countries, the payment amount of commercial insurance is up to 30 to 40 percent of the direct loss.

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