China News Service, March 26. According to the website of the State Administration of Financial Supervision and Administration, recently, in order to better meet the people’s needs for catastrophic protection, the State Administration of Financial Supervision and the Ministry of Finance issued the “State Administration of Financial Supervision and the Ministry of Finance’s Notice on Expanding Urban and Rural Residential Housing "Notice on Further Improving Catastrophe Insurance Coverage Scope" (hereinafter referred to as the "Notice"). The issuance of the "Notice" is of great significance to improving the construction of the catastrophe insurance system and accelerating the high-quality development of catastrophe insurance.
The "Notice" mainly includes three aspects:
The first is to expand catastrophe insurance liability to cover urban and rural residential buildings and indoor ancillary facilities. On the basis of existing destructive earthquakes, insurance liability is expanded to include natural disasters such as typhoons, floods, heavy rains, mudslides, and landslides.
The second is to increase the basic insurance amount and double the basic insurance amount of catastrophe insurance, from 50,000 yuan per household for urban residential homes and 20,000 yuan per household for rural residential homes, to 100,000 yuan per household for urban residential homes and 100,000 yuan per household for rural residential homes. 40,000 yuan per household. Each household can refer to the market value of the house and negotiate with the insurance company as needed to determine the insurance amount. The maximum amount shall not exceed 1 million yuan per household. The insurance company can provide commercial insurance for the portion above 1 million yuan.
The third is to support the development of commercial catastrophe insurance. For insurance liabilities and protection objects beyond the existing protection content, the China Urban and Rural Residential Residential Catastrophe Insurance Pool, with the approval of the general meeting of members, can provide commercial insurance supplements to fully meet the differentiated risk protection in various regions. need.
In the next step, the State Administration of Financial Supervision and the Ministry of Finance will continue to track the implementation of the "Notice", and in accordance with the basic principles of government promotion, market operation, and protection of people's livelihood, encourage insurance companies to provide more comprehensive multi-cause catastrophe insurance services, and gradually establish insurance policies. A catastrophe insurance system with Chinese characteristics that basically protects people's livelihood and provides high inclusiveness and wide coverage.
The full text of the notice is as follows:
State Financial Supervision and Administration Bureau
Golden Rules [2024] No. 2
State Financial Supervision and Administration Ministry of Finance
Regarding expanding the coverage of urban and rural residential catastrophe insurance
Notice on further improving the catastrophe insurance system
All regulatory bureaus of the State Administration of Financial Supervision, all finance departments (bureaus) of all provinces, autonomous regions, municipalities, and cities under separate state planning, the Finance Bureau of Xinjiang Production and Construction Corps, all insurance group (holding) companies, property insurance companies, and reinsurance companies, Shanghai Insurance Exchange , Insurance Association:
The Party Central Committee and the State Council attach great importance to catastrophe insurance. Since the establishment of my country's earthquake catastrophe insurance system, it has played an important role in responding to major earthquake losses and ensuring the safety of people's lives and property. In accordance with the spirit of the Central Financial Work Conference, in order to further implement the requirements of the "14th Five-Year Plan" and the 2035 Vision Goals Outline, improve the catastrophe insurance system, and accelerate the development of catastrophe insurance, the relevant matters are hereby notified as follows:
1. Expand catastrophe insurance liability
Covering urban and rural residential buildings and indoor ancillary facilities, the insurance liability extends from existing destructive earthquakes to secondary disasters such as typhoons and their resulting storm surges, floods, heavy rains, mudslides, landslides and other geological disasters.
Expand the operation mechanism, loss stratification and operation guarantee of catastrophe insurance, and implement unified management and operation in accordance with the urban and rural residential earthquake catastrophe insurance system. Matters such as the accrual, management, and use of expanded special reserves for catastrophe insurance shall be separately stipulated by the Ministry of Finance.
2. Increase the basic insurance amount
The basic insurance amount of earthquake catastrophe insurance is increased from 50,000 yuan per household for urban residential homes and 20,000 yuan per household for rural residential homes to 100,000 yuan per household for urban residential homes and 40,000 yuan per household for rural residential homes.
The basic insurance amount of the expanded catastrophe insurance is 100,000 yuan per household for urban residential buildings and 40,000 yuan per household for rural residential buildings.
Each household can refer to the market value of the house and negotiate with the insurance company to determine the insurance amount as needed. The maximum insurance amount for each insurance policy shall not exceed 1 million yuan per household. The amount above 1 million yuan can be supplemented by commercial insurance provided by insurance companies.
3. Support the development of commercial catastrophe insurance
China Urban and Rural Residential Residential Earthquake Catastrophe Insurance Pool was renamed as China Urban and Rural Residential Residential Catastrophe Insurance Pool. For risk liabilities and protection objects other than the above-mentioned protection contents, the China Urban and Rural Residential Catastrophe Insurance Pool, with the approval of the members' general meeting, can provide commercial insurance supplements to fully meet the differentiated risk protection needs of various regions.
Regarding the expansion of the operation and management of catastrophe insurance, if this notice does not provide for it, the notice of the China Insurance Regulatory Commission and the Ministry of Finance on Issuing the "Implementation Plan for the Establishment of the Earthquake Catastrophe Insurance System for Urban and Rural Residential Residential Residential Housing" (Insurance Regulatory Commission [2016] No. 39 )implement.
Attachment: Explanation on expanding catastrophe insurance coverage liability
State Financial Supervision and Administration Ministry of Finance
February 24, 2024
(This document is sent to local corporate property insurance companies and reinsurance companies)
Explanation on expanding catastrophe insurance coverage liability
1. Insurance liability
Typhoons (tropical cyclones with wind power of level 12 and above) and the secondary disasters such as storm surges caused by them, floods (flash floods, river flooding, urban waterlogging, tidal water ashore or backflow when the provincial level initiates flood control level IV and above emergency response) , heavy rain (heavy rainfall with a precipitation of more than 50 mm in 24 hours), mudslides, landslides and other geological disasters.
2. Insurance amount
For the above insurance liabilities, the insurance amount for each item is: the basic insurance amount for urban residential buildings is 100,000 yuan per household, and the basic insurance amount for rural residential buildings is 40,000 yuan per household. Each household can refer to the market value of the house and negotiate with the insurance company to determine the insurance amount as needed. The maximum insurance amount for each insurance liability shall not exceed 1 million yuan per household.
The amount above 1 million yuan can be supplemented by commercial insurance provided by insurance companies.
3. Compensation processing
Based on the insurance amount, refer to the insurance contract claim settlement standards, and combine the actual practices of rural housing disaster insurance that have been carried out in various places to determine the damage. Residential walls and load-bearing structures will be compensated in stages according to the damage level. Doors, windows and roofs will be calculated based on the actual square meters of damage. The amount of compensation shall be determined based on the actual value of the indoor ancillary facilities at the time of the accident. After determining each loss, compensation is calculated within the scope of the insurance amount.
4. Terms and rates
Use the model clauses for urban and rural residential catastrophe insurance that have been filed with the insurance regulatory agency and are applicable nationwide. Based on regional risk status, building structure, urban and rural differences, etc., differentiated insurance rates will be formulated within the scope determined by the insurance regulatory agency, and a risk concentration adjustment coefficient will be set.