The China Insurance Regulatory Commission (CIRC) said it will begin thorough investigations into the country’s insurance companies this month to promote the healthy growth of the fledgling insurance market.
The three-year project is aimed at comprehensively examining the practices in terms of legal compliance and internal control in the insurance industry, said Zhang Xiangxian, a senior regulatory official.
At the initial stage, five inspection teams will be organized to examine 20 insurance companies.
Property insurance inspection will be focused on irrational price competition of car insurance, life insurance, illegal fees paid for agent business, and intermediary insurance on commercial bribery.
On top of the regulator’s agenda this year is the crackdown on commercial bribery and illegal practices in the insurance industry, said Wu Dingfu, chairman of the CIRC.
On the inspection list are China’s largest non-life insurance company, PICC Property and Casualty Company; China’s largest commercial insurance company, China Life Insurance Company; Ping An of China and China Pacific Insurance Corporation, among others.
During the last two decades, China’s insurance industry has experienced a robust growth with revenue premiums annually increasing at an average rate of 30 percent.
In 2005, the total amount of revenue premiums and insurance assets reached 492.7 billion yuan (59.36 billion dollars) and 1522.59 billion yuan(183.4 billion dollars) respectively, said Wu Yuming, Vice President of CITI Group, on China Financial and Economic News.
The country’s insurance market is so large that local insurance companies are strengthening their presence and many foreign insurance companies are speeding up their pace to find a foothold in China.
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