中国首次推出地震保险

Earthquake often causes huge casualties and economic loss. In China, it is usually the government who plays the main role in guaranteeing the basic livelihood of the disaster area and maintain social stability after natural disasters. At the same time, government also funds for restoration and reconstruction for the disaster area.

But, the government's aim is to provide emergency relief. It cannot fully compensate the reconstruction of houses, apartment buildings and businesses in the aftermath of disasters. Thus, Sun Fuliang at China Earthquake Administration emphasized that it's very important to establish catastrophe insurance system.

"The establishment of earthquake catastrophe insurance system help to shift the original single model of relief and rescue into a multi-channel multi-faceted one; will closely integrated the disaster relief and risk prevention, as well as government relief and self-help in disaster areas, so as to fully mobilize social resources, increase aid provision, improve disaster restoration and reconstruction capability, and ease the financial pressure on the government in the face of catastrophe."

Homeowners can buy insurance policies with a maximum payout of 1 million yuan or 150 thousand US dollar to cover loss and damage to residential property caused by earthquakes with a magnitude of 4.7 and above.

The earthquake insurance policy is part of China's effort to establish a catastrophe insurance system aimed at using a market-driven mechanism to support disaster relief work and to reduce the fiscal burden on the government for loss compensation.

Zhu Junsheng is an economist from Capital University of Economics and Business in Beijing.

"Catastrophe insurance is more like a system rather than a production, concerning many departments including insurance and insurance regulatory departments, as well as financial and agricultural departments and so on. Aid from the government is just a kind of relief. It is more efficient to let the market mechanism, such as insurance companies, bear the main responsibility."

The earthquake insurance policy is sold by Chinese insurers nationwide. According to the insurance regulator, the premium rates vary depending on factors such as the location and construction of property, as well as the probability of earthquake.

The insurance regulator is also pushing nationwide legislation on the catastrophe insurance system and it is expected to complete the legal work by next year.

Sun Fuliang from China Earthquake Administration said:

"The insurance for earthquakes and other natural disasters relates to property rights of citizens, legal persons and other organizations, with strong policy consideration. In order to ensure its orderly development in the long term, it should be established by the basic law. We suggest, in the future, legislation would be passed to clarify the responsibilities of the catastrophe insurance system; the authorities of the government, insurance companies and other parties; and standardize the practice of catastrophe insurances."