Circular of the China Insurance Regulatory Commission on Requirements Concerning the Development and Submission of the Reform Scheme for Commercial Automobile Insurance Premium Rates

Circular of the China Insurance Regulatory Commission on Requirements Concerning the Development and Submission of the Reform Scheme for Commercial Automobile Insurance Premium Rates

Bao Jian Chan Xian [2015] No. 29

March 31, 2015

All the property insurance companies,

In order to standardize the development and submission of a reform scheme for commercial automobile insurance premium rates by each property insurance company, and ensure the smooth implementation of the pilot reform for commercial automobile insurance, according to relevant provisions of the Opinions on Further Reforming the Administrative System for Commercial Auto Insurance Clauses and Premium Rates and the Work Scheme for Pushing Forward the Pilot Reform of the Administrative System for Commercial Automobile Insurance Terms and Premium Rates, relevant requirements are hereby notified as below:

I. Insurance companies shall follow relevant provisions on non-life insurance product regulation and the principles and methods of actuarial studies in non-life insurance, and scientifically develop a scheme for commercial automobile insurance premium rates according to the principles of rationality, fairness and adequacy.

II. The general manager of an insurance company bears ultimate liability for the development and implementation of a scheme for premium rates and the influence thereof on the solvency and key financial indicators. The senior executives of an insurance company who are in charge of actuarial studies shall ensure that the data base, methods, assumptions and models as used during the development of a scheme for premium rates conform to general actuarial principles and relevant provisions of this Circular, and ensure that the scheme for premium rates are rational, fair and adequate. The senior executives of an insurance company who are in charge of the commercial automobile insurance business are responsible for the implementation of the scheme for premium rates, and ensure that it corresponds to the predefined scheme for premium rates.

III. An insurance company shall, before developing a scheme for commercial automobile insurance premium rates, maintain a comprehensive awareness of the risk features of its products, and rationally determine the objective and orientation of its scheme for premium rates according to the financial standing and history of premium rates of the company.

IV.
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