Vanderbilt Journal of Transnational Law


Henry R. Zheng

First Page



The insurance industry in the People's Republic of China (PRC) has expanded rapidly during the past several years. Since the end of 1979 when domestic insurance was reestablished, the income generated from insurance business has been increasing at a rate of over forty-four percent annually.' By early 1987, over 500,000 enterprises and business entities utilized property insurance and about 34 million people purchased personal insurance; during the first half of 1986 the total insurance earnings from the People's Insurance Company of China alone reached a record high of over 2.33 billion yuan. In the meantime, the insurance business has become much more diversified, and by the end of 1986 Chinese insurance companies were underwriting over 130 different types of coverage. Along with the growth of the insurance business, the laws and practice of insurance have steadily developed, and a basic regulatory framework of insurance has now taken shape.

The development of insurance law in the PRC has had a direct impact on foreign economic interests in China. Chinese law contains provisions making it compulsory to obtain Chinese insurance for certain kinds of foreign investment in China." Consequently, understanding Chinese insurance law and practice is important for a foreign investor to formulate and carry out well-informed investment or business planning in China. This eight-part article represents a preliminary review of the current Chinese insurance law and practice. Section II discusses the history and development of the Chinese insurance business, law and practice. Section III considers regulations and administration of the insurance business in the PRC. Section IV discusses the basic state law and the policies towards insurance. Section V illustrates Chinese laws relating to the insurance contract. Section VI explains Chinese insurance practice by introducing major insurance coverage. Section VII highlights major elements of dispute settlement relevant to insurance contracts, and Section VIII considers future prospects of Chinese insurance law and practice.