Individual Tax-Deferred Pension Pilot Program Among China Regulator’s 2012 Goals

China's insurance regulator said it intends to promote an individual tax-deferred pension pilot program this year, in addition to further developing the domestic rural insurance and catastrophe insurance markets, said Junbo Xiang, chairman of the China Insurance Regulatory Commission, in a conference in Beijing.

Xiang noted the CIRC will seek government support to "motivate the legislation on catastrophe insurance and bring this insurance system into the country's comprehensive catastrophe prevention system." It will then ask for government support in areas of the legal protection, fiscal and levy policies and catastrophe prevention and reduction.

The regulator said in 2012 it will also address problems related to motor insurance claims and the misleading sales of life insurance. The CIRC will also set up a sound insurance market entry and withdrawal mechanism, said Xiang.

The Chinese insurance industry maintained steady development in a tough year in 2011 and realized premium income growth of 10.4% year-on-year, to 1.43 trillion yuan (US$226.8 billion), according to the CIRC. Of that, property insurance generated premium of 461.79 billion yuan, up 18.5%; while individual life insurance generated premiums of 969.98 billion yuan, up 6.8%. Total assets of insurers in China were 5.9 trillion yuan.

During the year, the industry paid out insurance claims totaling 391.02 billion yuan. Coverage in rural insurance, pension and health insurance, liability insurance and export credit insurance expanded, noted the regulator.

The industry experienced a difficult year in 2011 and reported a significant drop in the growth rate, said the CIRC. The annualized return rate on investments of the Chinese insurance industry was 3.6%.

(By Rebecca Ng, Hong Kong news editor: [email protected])