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China issues new rule on pension insurance business

China issues new rule on pension insurance business

Source: Comtex Finance

BEIJING, Nov 13, 2007 (Xinhua via COMTEX) -- China's first rule on pension insurance business, the Regulations on Pension Insurance Business of Insurance Companies, will take effect as of January 1, 2008, announced China Insurance Regulatory Commission (CIRC) Monday.

The new rule makes regulations on the operation activities of pension insurance business in the aspects of operation entity, management of pension insurance product and operation and enterprise annuity management business.

It is aimed to normalize the pension insurance business of insurance companies and put forward improving the social multi-layer pension guarantee system, said a CIRC official.

The commercial pension insurance, as an important part of China' s pension guarantee system, has developed rapidly at an average annual speed of 15 percent since 2001. It realized premium revenue of 65.6 billion yuan in 2006 and had accumulated more than 200 billion yuan of pension insurance funds.

So far, 51 life insurance companies have undertaken pension insurance business and five professional pension insurance companies have started business, developing more than 100 varieties of pension insurance products.

However, generally speaking, China's commercial pension insurance is still at the primary stage of development, with small scale and low professional degree.

So, a CIRC official in charge noted that it is necessary to have a special rule on regulating the pension insurance business, which needs a long period for fund accumulation, involves a wide range of people and embraces many risk factors.

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