To safeguard the interest of the insured and the stability of the insurance and financial markets, in 2004, under the approval of the State Council, the former China Insurance Regulatory Commission (CIRC) established the insurance security fund system to be operated under the principle of “centralized administration and utilization,” creating China’s first market-based “self-help” system in response to risks in financial sectors. In September, 2008, CIRC, the Ministry of Finance, and the People’s Bank of China jointly issued the Measures for the Administration of the Insurance Security Fund, based on which the Chinese government sponsored the China Insurance Security Fund Co., Ltd. (CISFC), heralding the era of a company-run China Insurance Security Fund.
For Chinese regulators, the Fund system is an important risk resolution tool. As the administrator and operator of the Fund established with the approval of the State Council, CISFC is both a public-service financial institution and a corporation operating under corporate and market-based principles. Since its founding and under the strong leadership of high-level party committees, CISFC has been committed to “serving sector supervision, industry development, and insurance consumers,” and strived to become the identifier and alarm of industry risk, the pacemaker and “relief valve” of risky companies, and the stabilizer and booster of the insurance industry.
After a decade under the guidance and support of regulators, CISFC has made significant progress in party building, business development, corporate governance, and internal management, and duly performed its functions in preventing and controlling insurance risks and protecting insurance consumers. In particular, by playing an active role in the risk resolution of at-risk insurers, CISFC has not only effectively curbed potential industry risk, thereby indirectly safeguarding the interest of consumers, but also strengthened the foundations of the industry through major contributions to the market exit mechanism and the industry’s risk isolation capacity, by leveraging its extensive experience in risk resolution and risk relief.
During the past decade, the Fund has not only attracted wide attention home and abroad from peers and friends alike, but also gained recognition among international insurance security funds. Going forward, CISFC will continue to uphold its mission of “duly protecting insurance consumers” and its core values of “compliant and rigorous, professional and efficient, pragmatic and innovative, pursuing excellence,” in order to contribute to the sound development of China’s insurance industry, the protection of China’s insurance consumers, and the recognition of the China’s insurance security fund system worldwide.
Preventing systemic risks is the top priority of financial regulation. As the insurance industry enters the era of accelerated development, the insurance security fund system is poised to play an increasingly influential role. Accordingly, at the start of this new era, CISFC will firmly uphold the central leadership of the CPC Central Committee, vigorously implement national decisions and plans for the financial and insurance markets, and continuously improve the insurance security fund system and its operating mechanisms. CISFC’s goal is to further enhance its capacity in preventing and mitigating risks, become more effective at managing the Fund and monitoring and resolving industry risks, and work with each line of the industry to ensure systemic financial risks never occur.
Chairwoman of the Board