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A new law on insurance and new rules on vehicle insurance took effect the first day of 2003.
With the new law, which will benefit insurance companies, enhance regulation of insurance agencies and increase the reputation of the insurance industry, property insurance companies can sell accidental insurance policies. This is expected to enhance competition in the short-term life insurance market. Some companies said they will be actively involved in this field, with products such as accidental aviation insurance policy.
All insurance companies will have more rights in drawing up insurance rates and can develop distinctive products.
Reinsurance will be greatly affected according to the new law. The set reinsurance rate will be decreased five percent year on year from the current 20 percent.
Insurance for vehicles is now market-oriented. The new regulation allows companies to formulate rates according to risks of vehicles and drivers' safety records.
China also plans to reform accidental aviation insurance products at the beginning of 2003. All the policies will be sold by computer and customers can ask for refunds or change according to flights.
(Xinhua News Agency January 2, 2003)
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