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Guidelines set for risk unit insurance

By Song Hongmei (chinadaily.com.cn)
Updated: 2007-01-15 13:51

Related publication: Related readings: Insurers given guidelines on investments

TheChina Insurance Regulatory Commissionreleased risk unit insurance guidelines on its website last week covering petrochemical, semiconductor, port construction and commercial building enterprises, a move to set up price standards for big commercial risk projects.

All property and casualty insurance companies and reinsurers are required to abide by the guidelines as of February 1.

A risk unit refers to the maximum loss or damage possibly caused by the occurrence of a single insured event. According to China's insurance law, the liability borne by an insurance company for each risk unit shall not exceed ten percent of the combined total of its paid-up capital and its accumulated reserve fund. Reinsurnace shall be arranged for the portion in excess of this sum.
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The full text is available in the January Issue ofChina Insurance.