Effective from 1 May 2012, foreign insurers are allowed to enter China’s compulsory transport accident insurance market which was previously open only to domestic insurers.

Having access to this market should help foreign insurers benefit from China’s huge auto insurance market, which accounts for roughly 70 percent of the nation’s property and casualty insurance market in terms of premiums.

Since introducing Compulsory Motor Vehicle Accident Liability Insurance in 2006, the Chinese government has kept tight controls on pricing in the market which resulted in losses for domestic insurers. As a result, the Chinese government now intends to issue a new version of Measures on Compulsory Motor Vehicle Accident Liability Insurance in June 2012, which is intended to lead to pricing deregulation of compulsory auto insurance.

Please click here for a copy of the Global Times article on this topic.