Chinese airline insurance companies will be in fierce
competition later this year when the China Insurance Regulatory
Commission (CIRC) stops the industry's years of price fixing.
From December 1, 2007, airline insurance prices will be
diversified from the current 20 yuan, a price that has remained
unchanged for over four years, according to the CIRC. The 20-yuan
mark was set in 2003 in an attempt to regulate the booming
market.
The guideline, which was approved by the CIRC, will expire in
December and insurance companies will then be able to diversify
prices in line with their market strategies, the CIRC
announced.
According to eastday.com's citation from an anonymous industrial
insider, some companies have garnered huge profits from the
monopolized market. The cost of an airline insurance product is
estimated at about three yuan, while the insurance premium reaches
20 yuan, Beijing Youth Daily reported on September 23.
Despite the benefits for legitimate companies, the loosened
regulations may open the door to fake products and illegal brokers.
The CIRC suggests companies take appropriate measures to prevent
such a market from emerging.
(China.org.cn by Wu Jin September 24, 2007)