What Is Compulsory Insurance?

The so-called compulsory insurance refers to the insurance that must be taken by any unit or individual within the prescribed range, regardless of whether it is willing or not, according to the relevant laws and regulations promulgated by the state. For example, countries around the world generally provide compulsory third party liability insurance for motor vehicles as a type of compulsory insurance. Because the compulsory insurance is a state intervention in the individual's will, the scope of compulsory insurance is strictly limited. China's "Insurance Law" stipulates that insurance companies and any other units shall not force others to enter into insurance contracts except those required by laws and administrative regulations.

Compulsory insurance

The so-called compulsory insurance refers to the insurance that must be taken by any unit or individual within the prescribed range, regardless of whether it is willing or not, according to the relevant laws and regulations promulgated by the state. For example, countries around the world generally use motor vehicles

Compulsory insurance

The so-called voluntary insurance means

Pay strong insurance [full name

Compulsory insurance can be divided into three types according to different legislative departments:

1. Compulsory insurance implemented nationwide

According to statutory procedures, laws passed by national legislatures and compulsory insurance regulations promulgated and implemented by the central government, such compulsory insurance is generally provided by insurance institutions authorized by the state and enforced by administrative means. This type of compulsory insurance provides specific scope for the insurer, the insured, and the subject matter of the insurance. Regardless of whether the insured or the insurer agrees, there is no choice. The rights and obligations of both parties are subject to legal restrictions, such as: China's "Regulations on Compulsory Personal Injury Insurance for Aircraft, Train, and Ship Passengers", as well as social insurance such as unemployment insurance and endowment insurance.

Features of this type of insurance:

(1) mandatory;

(2) a late payment penalty for insurance premiums not paid as required;

(3) Guarantee the uniformity of standards

2. Compulsory insurance implemented at the local level

According to the relevant laws of the country, local governments have enacted local insurance regulations to enroll in insurance regulations. For example, 24 provinces and cities in China have adopted compulsory insurance for motor vehicle third party liability insurance.

3. Compulsory insurance implemented in specific industries

According to the relevant laws and regulations issued by some government administrative agencies, it is required to insure corresponding insurance for engaging in certain business activities, otherwise it is not allowed to engage in production and business activities, such as mortgage loans made by commercial banks in China to enterprises or individuals It is stipulated that when real estate is used as collateral for loans, the collateral must be insured.

The characteristics of the above 2nd and 3rd compulsory insurance: there is a compulsory side, that is, the insured person must participate in insurance in accordance with relevant laws and regulations, and a non-mandatory side, that is, the insured person can voluntarily choose an insurance company to purchase insurance. The laws and regulations of these two types of compulsory insurance only stipulate that certain industries and individuals must participate in insurance when engaging in business or other activities, and for the occurrence of insurance relationships, the insured chooses the appropriate insurance for insurance. ^[2]

Achieving social harmony and building a better society are China's current and future strategic goals for a considerable period of time. Insurance is a business risk

Compulsory insurance relaxes legislative restrictions

Article 2 of Article 11 of the Chinese Insurance Law stipulates that insurance companies and other units shall not compel others to conclude insurance contracts except those required by laws and administrative regulations. This provision clarifies that only laws and administrative regulations have the power to determine compulsory insurance. The background of the provision was that at that time, China's economy was not highly market-oriented. There were only three companies in the insurance industry across the country. There was no market competition pattern. Insurance companies did not focus on marketing and improve service quality. Instead, they adopted public relations and benefit distribution. Government departments and local governments issued documents to promote commercial insurance by administrative means, so that in some places, insurance was classified as a disguised form of random allocation and arbitrary charges, which should be cleaned up. It is against this phenomenon that the insurance law strictly limits the power of compulsory insurance, which has played a very important role in inhibiting the use of administrative methods to promote commercial insurance.

However, with the continuous deepening of China's reform and opening up, the insurance industry has undergone tremendous changes. There are about 100 Chinese and foreign insurance companies. The insurance market is highly competitive, especially as insurance deals with emergencies, stabilizes the society, and promotes the building of harmony. The role of society is becoming more and more prominent. Only laws and administrative regulations have the right to determine that compulsory insurance is too strict, and it has been broken through in specific operations. For example, before the promulgation of the Road Traffic Safety Law and Compulsory Accident Liability Insurance, 26 provinces and municipalities across the country implemented this compulsory insurance through local legislation, government regulations, and other forms; for example, some local governments proceeded from actual conditions. , Requiring mandatory public accident liability insurance for some public places of business, and achieved good social and economic benefits. In view of the actual situation of imbalanced development across China and various industries, consideration can be given to the determination of compulsory insurance rights to be issued to the insurance supervision department and local governments or government departments to jointly issue regulations. ^[4]

Compulsory insurance streamlines supervision

Because some laws and regulations have not been revised in time, the society has some doubts about some compulsory insurance, and some even cause administrative litigation. For example, the compulsory insurance for railway passenger accidental injury, the train ticket contains 2% compulsory insurance premium, which is based on the "Compulsory Insurance of Railway Passenger Accidental Insurance Regulations" issued on April 24, 1951 by the Finance and Economic Commission of the State Council, and the insurance amount is 20,000 yuan. According to the insurance law, only administrative regulations have the power to determine compulsory insurance, and the terms and rates of compulsory insurance are subject to approval by the insurance regulatory department. According to the Ministry of Railways, due to the increase in personal injury compensation standards, the insurance amount of 20,000 yuan has fallen far short of the victims' compensation requirements. The terms, rates, and insurance amounts of this compulsory insurance should be fully revised as soon as possible. In addition, some local regulations and government regulations have surpassed powers to provide for compulsory insurance, and some of them have to issue insurance certificates in the course of business to form de facto compulsory insurance. In this regard, research and analysis should be strengthened, and cleaned up and modified in a timely manner.

Compulsory insurance strengthens supervision

Strengthen approval of compulsory insurance terms and rates

China's insurance law stipulates that insurance regulatory agencies should follow the principles of protecting the public interest and preventing unfair competition when approving compulsory insurance. because

Compulsory insurance sign

Therefore, when approving compulsory insurance clauses and rates, special attention should be paid to the fairness and non-profitability of the clauses to protect the legitimate rights and interests of the insured. Because in the compulsory insurance, the insured and the insured are in a passive position, and they have no right to choose and negotiate on the fairness of the terms and rates, especially the insured in compulsory insurance is often an unspecified third party. Before the insured accident occurred, no specific interest subject concerned the rights and interests of the insured. The Regulations on Compulsory Motor Vehicle Accident Liability Insurance promulgated by the State Council in March 2006 stipulated that the Insurance Regulatory Commission shall review and approve insurance premium rates in accordance with the principles of overall non-profit and non-loss.

This provision sets a model for later approval of compulsory insurance rates. The purpose of promoting compulsory insurance is to use the market means of insurance to help the government handle accidents and emergencies and maintain social stability, thereby serving to build a harmonious society, rather than helping insurance companies expand their business scope or profitability. Therefore, in reviewing and approving the fees, the profit factor and part of the business development costs should be deducted. Special attention should be paid to the disclosure of procedures. In principle, a hearing should be held, relevant experts should be invited to participate, the actuarial data should be disclosed, and media reports should be supported. Check the situation and use the fairness of the procedure to ensure the justice of the entity;

Compulsory insurance protects legitimate rights and interests

Separate accounting for compulsory insurance and establishment of special financial supervision and accounting methods.

Strengthen supervision of compulsory insurance claims. As insurance is a lucky contract, claims settlement according to law is the core link to protect the interests of the insured. This is specifically reflected in the "Regulations on Compulsory Insurance of Motor Vehicle Traffic Accident Liability", which provides for the problems that arise in the practice of claims. Three obligations for insurance companies:

First, the obligation to respond to relevant matters such as compensation procedures in a timely manner;

Second, after receiving the claim for compensation, explain the compensation standards and documents required within one day;

Third, the 5th core compensation, 10 compensation insurance. Compared with the current similar commercial insurance, it is more conducive to protecting the interests of the insured, and puts forward higher requirements for the claims of insurance companies. In the current situation of a few insurance companies with poor reputation and the existence of dragging and refusing to pay, the insurance supervision department should strengthen supervision and increase the punishment for illegal acts. When necessary, cancel the operation qualification of the illegal company for compulsory insurance business. Therefore, to do a good job of compulsory insurance, we must firmly establish the concept of doing our own work, thinking about the whole situation, and doing our best to serve the whole situation. We recognize that this is a concrete manifestation of governing for the people.

According to the relevant provisions of Article 95, Article 90 of the Road Traffic Safety Law, and Article 56 of the Guangdong Road Traffic Safety Regulations, the expiration of compulsory insurance is deemed to be the absence of an insurance sign. To detain the vehicle, deduct 1 point and fine 100 yuan.

Compulsory insurance