China’s First Mutual Insurer Opens.doc

China’s First Mutual Insurer Opens 　　Chinas first mutual insurer has opened in Bei- jing， representing a step toward the countrys goal of diversifying its insurance industry. Zhonghui Property Mutual Insurance， with initial working capital of 1 billion yuan （$146 million） from 12 founding members， will offer credit insurance to small and midsize enterprises plus shortterm health and personal accident insurance， according to a statement published on the website of the China Insurance Regulatory Commission （CIRC）. Zhonghui Property is one of the three mutual insurance associations that won approval from the CIRC in June. The other two， Xinmei Life Mutual Insurance and Huiyou Jiangong Mutual Insurance， are waiting for the commissions final review before starting business， according to a source close to the CIRC. Xinmei Life will focus on long-term pension and health-insurance policies， while Huiyou Jiangong will specialize in insurance protection for the construction industry， according to the CIRC. Mutual insurance associations are set up with a cooperative structure and entirely owned and managed by policyholders. By purchasing a policy from a mutual insurer， the buyer becomes a member of the association， and their payment is combined with those of other policyholders to form a fund. Withdrawals are then made from that fund to cover members’ claims under pre-agreed conditions. The United States established its first mutual insurance company in 1752. Now the National Association of Mutual Insurance Companies （NAMIC）， which represent mutual insurers in U.S. and Canada， has over 1，400 member companies， according to NAMICs website. Worldwide， mutual insurance represents about 27% of global insurance premiums in 2014， according to the International Cooperative and Mutual Insurance Federation. In China， the business structure of mutual insurance only won government approval in 2015. In April 2016， the State Council， Chinas cabinet， approved the laun