The insurance watchdog in Shanghai is committed to driving product innovation while supervising the market, in a bid to prepare insurers for their expanded role in economic development and social progress.

 

"We are gathering pace in creating a healthy environment for the development of the insurance industry in Shanghai. The new industry will help with social management and better serve society," said Li Feng, director of non-life insurance supervision for the China Insurance Regulatory Commission's (CIRC) Shanghai bureau.

 

By leading the development, Shanghai is spearheading innovations that can set an example for other regions to follow.

 

Insurance is widely seen as vital to the future development of China's economy, which will need increasingly sophisticated services.

 

Furthermore, insurance will also have great implications for the improvement of various social services, particularly medical services and pensions.

 

The CIRC's Shanghai bureau and Shanghai Fire Protection Association are to jointly issue a pilot product for public liability insurance for fire damage. The liability insurance policy covers claims brought against the insured by a third party or member of the public.

 

"This is an active reaction to the appeal from the central government to strengthen the role of insurance in social management," said Wu Qinghua, director of the life insurance supervision division of CIRC's Shanghai bureau.

 

Jiangsu Province became one of the first areas to launch public liability insurance for fire damage in August, after the CIRC and the Ministry of Public Security released a circular calling for the development of a policy to protect property owners from the menace of fire.

 

In Shanghai, the first batch of pilot policies will be issued for crowded public places, including department stores, hotels, cinemas, hospitals, airports, railway stations and stadiums.

 

Industrial experts will choose one of the city's many insurers to offer the new service. The selection process is expected to begin next month.

 

Shanghai has also been chosen by the CIRC to trial the first classification exam for insurance salespersons, with a finished model of the test later introduced to other parts of the country.

 

The test, which will be preliminarily set in the first half of next year, is supplementary to the existing compulsory qualification examination and aims to help salespersons specialize in one or two product lines.

 

"Although it is an elective test at the initial stage, it does raise the threshold for access to the profession and sets a feasible standard by which we can judge how well qualified salespersons are," added Wu.

 

According to statistics issued by the bureau, Shanghai's insurance industry maintained a steady growth in the third quarter of this year, with its premium income amounting to 27.86 billion yuan (US$3.48 billion) in the past eight months.

 

Foreign-invested insurers accounted for more than 18 percent of the market share in Shanghai.

 

Apart from increases in life and property insurance, compulsory vehicle liability insurance has also proven a hit in the industry since it was launched on July 1. Premium income from the service has now reached 194 million yuan (US$24.25 million) against claims expenses of 563,200 yuan (US$70,400) from July to August.

 

Compulsory vehicle liability insurance was the first compulsory insurance product in China. It is designed to ensure the victims of traffic accidents receive timely medical treatment and financial compensation.

 

(China Daily September 27, 2006)